Kilsby & Williams Chartered accountants have compiled some key points which you should consider before deciding on your vehicle.
Business v Personal
The decision whether to opt for business or personal leasing is often a balancing act, but ultimately for most people cost is the main driver. The following factors should be considered as part of the overall decision-making process:
•Business and private mileage;
•Running costs: fuel, insurance, maintenance;
•Tax and VAT relief.
Choosing A Vehicle
•Choosing cars with low emissions is not just better for the environment: it also saves tax.
•Employees that have cars available for private use suffer a taxable benefit in kind. In order to minimise the cost of this, it is advisable to select a low emissions vehicle: ideally one with emissions below 50g/km. This also is good for the employer as the national insurance cost is lower.
•Diesel cars are subject to a 3% supplement when working out the value of a benefit in kind, making it more expensive for employees. Against this, a business must take into account the cost of fuel when comparing diesel and petrol cars. Ideally, hybrid vehicles would be both tax and cost effective.
•100% VAT recovery on maintenance & 50% VAT recovery on hire charge for taxable businesses on contract hire.
•100% tax deduction for contract hire charges or depreciation if finance lease, on cars with emissions less than 130g/km.
Benefits of Contract Hire/Finance Leasing
•Cars lose considerable value in the first 3 years and annual costs of servicing and maintenance can be prohibitive, especially as cars get older. Rather than owning cars that have nominal re-sale value and are expensive to maintain, hiring or leasing a car enables businesses to factor in anticipated costs in budgets and forecasts.
If you would like more information regarding Kilsby & Williams and the services they offer, please visit their website www.kilsbywilliams.com or contact 01633 810 081.
* All vehicle images and car descriptions on this site are for illustration and reference purposes only and are not necessarily an accurate representation of the vehicle on offer.
T: 02920 099033
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