When considering a new vehicle which is to be funded through your business it is important to assess the both financial and tax implications that the running of a company car (click the link to see the tax implications) has. As an employee of a Limited company the use of a company car is considered as a benefit in kind and is therefore chargeable through the PAYE scheme as a Benefit in Kind – this must be detailed on your personal P11d forms. The amount of tax payable depends on the below:-
- Personal Tax position
- Vehicle fuel type
- Vehicle emissions level
- Vehicle age
As an example we have shown the tax calculation for a Volkswagen Golf 1.6 TDI GT 5dr manual and the Volkswagen Golf 1.4 TSI GTE DSG Hybrid leasing leased through the business. The calculation is performed as below:-
In order to assess the BIK Tax liability, first we multiply the vehicles P11D value which includes all options by the Benefit In Kind (BIK) percentage by the percentage of your tax bands e.g.. 20/40/45%.
|Make and Model of Vehicle||Vehicle Options||P11d Value||Vehicle emissions + taxable %||20% Tax payable (monthly)||40% Tax payable (monthly)|
|Volkswagen GOLF 1.4 TSI GTE 5dr DSG||Standard||£30580||38g/km – 7%||£45.87||£91.74|
|Volkswagen GOLF 1.6 TDi GT 5Dr manual||Standard||109g/km – 20%||£89.20||£178.40|
|These figures are for guidance and based on simple, limited data, further guidance can be obtained by visiting the HMRC webpages.|
The above table clearly shows the benefits of having a hybrid over a diesel engine! Visit our Hybrid / Electric hybrid leasing.
The process of setting up a Business Car lease or Business Contract Hire agreement is relatively easy and quite simply involves a credit check on the company, this credit check will assess affordability and also business strength. Usually this can be done via the credit reference agencies , however sometimes a further more detailed look is required and this is where we (AMG Autolease) or the underwriters may request to see sight of financial documents such as latest Filed FULL accounts, recent monthly bank statements and future potential projections. Provided these checks come back positively the next stage is simply to agree pricing on a specific vehicle and contract parameter. We offer parameters on Business Contract leasing as below :-
- Contract lengths – 1 year, 2 years, 3 years, 4 years
- Deposit amounts – Zero deposit, 1 payment, 3 payments, 6 payments, 9 payments
- Annual mileages from 5k -50k per annum
- With FULLY inclusive maintenance or Customer own maintenance
Once this has been agreed and the vehicle selected we will then order from our suppliers, arrange for the final financial documentations to be sent to the customer and then finally arrange our Nationwide Car leasing delivery for a time and date to suit you.
At the end of the business lease the business then has the option to either;
- Extend the contract by 6 or 12 months
- Purchase the vehicle through a 3rd party (AMG can facilitate this)
- Hand the vehicle back and start a new agreement
AMG Car Leasing will be on hand throughout the contract, to offer advice on service, tyre replacements, damage and accident management and also we will offer contract end reminders from 9 months prior to the end of the contract.
Click here for more information on Business leasing and other FAQs.