Contract hire with maintenance

1This is a simple Operating Lease that includes full maintenance, servicing and road fund licence. It provides a complete fixed cost motoring package, leaving you free to concentrate on running your business.

Cash flow benefits

With a low initial outlay, normally expressed as monthly rentals in advance, followed by fixed monthly payments, you know exactly what your monthly motoring costs will be. Contract Hire may also be classified as “off balance sheet” which may improve the financial ratios in your accounts (gearing).

Tax implications

As it is an Operating Lease your finance rentals can be offset against taxable profits. If you are VAT registered, you can reclaim 50% of the VAT on the finance element of the rentals if the vehicle is used privately, or 100% if it is used exclusively for business or is a commercial vehicle. What’s more, all the VAT on the maintenance element of the rental can be recovered, irrespective of vehicle use.

Who owns the vehicle at the end of the agreement?

At the end of the agreement you may arrange a brand new vehicle to replace your current vehicle, handing the old one back to us. We will arrange for vehicle disposal.

Contract hire without maintenance

2This is an Operating Lease without maintenance or servicing. It is a simple and straightforward facility that can offer some businesses an efficient package that lets you retain control of your own vehicle servicing and maintenance.

Cash flow benefits

A vehicle on an Operating Lease can be classified as “off balance sheet” for accounting purposes, therefore offering advantages to your business by improving its financial ratios (gearing).

Tax implications

As it is an Operating Lease your finance rentals can be offset against taxable profits. If you are VAT registered, you can reclaim 50% of the VAT on the finance element of the rentals if the vehicle is used privately, or 100% if it is used exclusively for business or is a commercial vehicle.

Who owns the vehicle at the end of the agreement?

After you have paid your regular fixed monthly rentals for the fixed period, at the end of the agreement you simply hand the vehicle back.

Finance leasing

3It can be one of the most cost effective options if you need full use of a vehicle for minimum outlay dont require final ownership.

Tax implications

The rentals can be offset against taxable profits. If you are VAT registered, 100% of the VAT payable on the rentals can be reclaimed for any commercial vehicle or car used exclusively for business purposes. 50% of the VAT can be reclaimed for a car used for both business and private mileage.

Who owns the vehicle at the end of the agreement?

At the end of the lease the vehicle is sold and the sale proceeds (less a nominal sum) are refunded to you as a rebate of rentals, which attract VAT. Due to its low initial outlay, fixed costs throughout the rental period, excellent tax efficiency and flexibility, Finance Lease is favoured by many business users.