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The rules have changed!

Today, contract hire is a much more efficient way to manage your fleet than contract or hire purchase.

Overall, the change in tax rules mean that the after-tax cost of acquiring the use of a vehicle via contract hire is generally less than the cost of ownership. Leasing is better than purchase because:

1. Acceleration of Tax Relief

Customers can claim tax relief for the lease rentals over the term of the lease and therefore obtain tax relief for the cost of “usership” over the term of the lease. 100% tax relief is now available for the rental paid on all cars with C02 emissions of greater than 130g/km. For those cars with C02 emissions greater than 130g/km, tax relief is still available for 85% of the lease rental (exclusive of maintenance). For purchased cars tax relief is given via capital allowances and it will generally take in excess of 20 years to receive tax relief for the commercial depreciation suffered on the car.

2. VAT efficient

VAT remains recoverable on lease rentals (100% for full business use, 50% part business use, 100% maintenance). However, no VAT is recoverable under outright purchase unless the car has no private mileage.

3. Residual Value Risk

Fleet Financial underwrites the residual value risk on the car - unlike hire purchase / outright purchase where the risk rests with the end user / customer. What is the perfect tax-efficient, low-cost company car for you? Ask us! There is no one size fits all approach. Tax liabilities depend very
much on your business and usage. We can advise on the best vehicles and package to save you money:

• Low service and
maintenance costs
• Current tax advantages
• Whole life costs
• CO2 emissions
• Vehicle mpg
• Vat savings

Interested? Contact us today using the form below:

Contract Hire | Cars
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