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This is a hire agreement with features specifically designed for the business user, and if you are VAT registered there may be even more financial reasons why leasing is for you. Finance lease is a tax efficient way to fund your vehicle, combining the benefits of leasing and ownership. At the beginning of the contract, your monthly lease payment will be calculated by taking the cost of the vehicle (excluding VAT) plus finance charges over an agreed period between one and four years. When the agreement ends, and subject to the terms and conditions of the agreement being met, you may sell the vehicle to a third party and benefit from the proceeds of sale. Alternatively you can extend your lease for a vastly reduced rental. As this is a lease, it is regarded differently to "purchase contracts" for tax purposes, enabling you to benefit from certain tax advantages. The finance provider can reclaim VAT on the purchase price of the vehicle thus reducing your monthly rental, although VAT is charged on the rentals you pay. You can generally claim 50% of the VAT in the same way as contract hire. The vehicle appears on your balance sheet with the outstanding rentals showing as a liability. A proportion of all the rentals can be claimed as business expense against taxable profits and the proportion is dependant on the price of the car being leased. Benefits: - Flexible Deposits - Fixed monthly rentals aid budgeting and cash flow - VAT efficient - No mileage restrictions - Benefit of ownership - Residual values available to reduce monthly payments |
