Contract Hire
Contract Hire
Contract Hire is an ‘off balance sheet’ operating lease, which enables hirers to maximise their tax relief without the risk of ownership and depreciation. Variable maintenance packages are also available to help deliver a comprehensive vehicle management solution.
Corporation Tax
Monthly rentals are treated as a revenue expense and so are fully allowable on vehicles with an original cost up to £12,000 including VAT. If the vehicle cost is more than £12,000, only a proportion of the rental is allowable. Commercial vehicle rentals are 100% allowable regardless of capital cost. *Example: On a vehicle with a capital cost of £14,000, the monthly rental would be subject to 93% as a revenue expense.
VAT
The lessor reclaims the input VAT on the original capital cost of the item, with rentals calculated on the VAT exclusive price. All monthly payments are subject to VAT at the current rate. For vehicles, which qualify under Article 7(2) (a) of the VAT (Input Tax) order, 1992 (as amended), if the vehicle is available for private use, only 50% of the VAT charged on the finance element of the payment can be reclaimed.
100% of the VAT charged on the maintenance element can always be reclaimed.
The Contract
The contract can be tailored to meet your company’s exact requirements, with a variety of maintenance and mileage packages, and the option of a relief vehicle. You can also achieve one fixed monthly payment for your company vehicle.
The Benefits
*Flxed monthly costs
*Maximised tax relief
*Minimum capital Outlay
*No disposal or depreciation problems
*Reduced administration costs
Interested in our services?
We want to know your needs exactly so that we can provide the perfect solution. Let us know what you want and we’ll do our best to help.
