Tax implications with Contract Hire

Hiring vehicles for business use can be a cost-effective way to manage your company's motoring needs. One of the savings you can take into account is on tax - here are some examples of the ways you could benefit.

Contract Hire provides you with a new car for a set amount of time and with fixed monthly payments. As a business, you'll be able to claim back VAT on the purchase price of the vehicle. 100 percent of VAT can be reclaimed if you're VAT registered and the car is used exclusively for business.

Under a hire purchase agreement, the car is considered as an asset to your company. This means that any depreciation in the model's value can potentially be offset against your taxable profits. Repayments made on your vehicle may also come under this heading, and tax relief could be available on interest charges accrued during your hire term.

As terms and conditions, tax implications and your options may vary depending on the purchase agreement you choose, please contact us for advice before selecting a business car. We can advise on your best options and whether Contract Hire is most suitable for you.

The dedicated business team at all of our Lookers dealerships is there to support you and your company. As the fleet manager or decision maker, simply get in touch today to discuss your requirements.