Vehicle Leasing Benefits

Contract Purchase Benefits

  • Minimum initial expenditure
  • A fixed monthly rental allowing accurate budgeting and cash flow forecasting
  • No capital tied up in depreciating assets
  • If you choose not to purchase when you reach the end of your contract, any depreciation is not your responsibility
  • Constant mobility with no purchasing or disposal problems
  • VAT payable on service options only
  • Vehicle shows as a balance sheet asset
  • Capital allowances claimable against taxable profits

Contract Hire Benefits

  • Costs paid from income not capital (this means no capital is tied up in the case of depreciating assets)
  • Fixed monthly cost allow greater accurate budgeting/cash flow forecasts
  • Leasing companies can reclaim all VAT on vehicle purchase price to give you much lower monthly payments
  • Minimal initial expenditure, typically three month in advance
  • Rentals allowable against taxable profits
  • For new cars and commercial vehicles - assuming some personal use, current legislation allows reclaim of 50% on your monthly rental against your VAT liability. The other 50% can be offset against taxable profits
  • For pool cars and commercial vehicles, current legislation allows reclaim of 100% VAT and 100% offset against taxable profits
  • Rentals allowable against taxable profits
  • Costs are off your balance sheet, improving gearing ratios and return on your assets

Finance Lease Benefits

  • Costs paid from income not capital (no capital tied up in case of a depreciating asset)
  • Fixed monthly rental allowing for a greater accurate budgeting and cash flow forecast
  • Leasing company can reclaim all VAT on vehicle purchase price to give you lower monthly payments
  • Minimal initial expenditure, typically three months in advance
  • Rentals allowable against taxable profits
  • For new cars and VAT qualifying used cars - assuming some personal use, current legislation allows reclaim of 50% of VAT on your monthly rental against your VAT liability. The other 50% can be offset against taxable profits
  • For pool cars and commercial vehicles, current legislation allows reclaim of 100% VAT offset and offset 100% of monthly rental against tax
  • A final payment (residual value) can be included in the lease to reduce monthly rental

Lease Purchase Benefits

  • Minimal initial expenditure, typically three months in advance
  • Fixed monthly payments for accurate budgeting
  • VAT on monthly payments not applicable
  • Option to purchase at the end of the contract
  • Flexibility of structuring the option-to-purchase price or residual value
  • Vehicle shows as an asset on your balance sheet