Are you thinking about a business leasing deal for your company car? There are many benefits of choosing...
Choosing a business lease for your company cars is a great way to provide a fleet of vehicles for your workforce with no hidden costs or high upfront fees. It’s a much more desirable option as you can get your hands on great vehicles for a smaller fee and exchange them for newer models when the contract ends.
There are many other benefits to leasing instead of purchasing, such as the tax implications, and it’s definitely something to consider if you’re thinking about business contract hire. A business car lease can potentially be 100% tax-deductible, so it’s a fantastic option to look into.
Here’s why it’s worth considering a business car lease:
Lower company car tax rates
A company car is considered a Benefit In Kind (BIK) as it’s an asset and therefore is taxed along with your income. The amount of tax depends on the vehicle’s price list, CO2 emissions, and the type of fuel it uses. Electric cars are exempt from tax so considering a hybrid or electric car lease is a great idea. Furthermore, the lower the CO2 emissions of the vehicle, the less tax you will need to pay for it, so it’s beneficial to lease a car with lower emissions.
If you plan to use the company car for both business and personal use, you will be able to claim back up to 50% of the tax you pay and 100% if the car is used solely for business. This will reduce the overall cost of leasing the vehicle and make it a more effective option than an outright purchase. Company car tax is much cheaper than personal car tax and certainly lower than the tax payable for purchasing a company car for your business. If you are eligible, you’ll have to submit a VAT return form that details the personal mileage accumulated.
Minimal capital expenditure
If you decide to lease company cars then you will find yourself with a lower capital expenditure due to the low rental costs and low initial rent payments compared with buying company vehicles. Business leasing has the lowest tax rates if you choose a car with low CO2 emissions compared with buying or personal leasing and so you’ll be left with much lower expenditure on fixed assets.
Business benefits to car tax leasing
Driven Leasing has a wide range of cars and vans available for business car leasing including electric and hybrid vehicles to help you save money on your company car tax rates. We offer business leasing deals as well as personal contract hire, so we’re sure we’ll have the right option for you. Get in touch with us today to find out more.