Car Leasing Companies and Contract Hire Companies in the UK

Car Leasing Finance & Taxation Issues

There are several reasons why businesses should choose to lease their company cars or van fleet, many of them are obvious but often car leasing gets overlooked when drivers, fleet managers or business owners don’t investigate the real tangible benefits that vehicle leasing offers. They simply continue with the status quo, or have an unqualified desire of ownership or simply transfer the options available from their personal circumstances to the business environment.

Many successful businesses are not necessarily cash rich, albeit when cash is available they consider using it to acquire large assets such as cars or vans, when on reflection it may not always be the best use of their finances.

Car leasing or leasing of a vehicle offers such a variety of benefits, least of all, accurate monthly budgeting, improved cash flow, minimum capital expenditure and fixed interest payments. All which offer stability when forecasting for the future.

For example when choosing to lease a new or used vehicle under a “Contract Hire” or “Finance Lease” contract, the monthly rentals are allowable against the companies taxable income, VAT is reclaimable against each monthly rental for each quarter return. In addition to these major benefits contract hire and leasing also removes the vehicle depreciation risks, unlike vehicle ownership.