Why leasing a company car is a viable option
Whatever your sector, getting a company car can be a costly process. We look at some different options for doing this and consider what might work best for you and your company. Should you buy or lease and just what is company car tax anyway?
Traditionally the only cars used within a company would have been bought outright and mean there is no complications in the future. However, once the UK tax system started to identify cars as taxable and impose company car tax on employees, many people began to seek alternative options.
What is company car tax?
Notoriously a bit of a grey area, company car tax is imposed if the member of staff or anyone in their family uses the car for anything outside of work. This even includes commuting to work, which many people have to do in order to use the company car!
Essentially, they have to pay tax on the value to them of the car, which can vary greatly dependent on type of car, how old it is and how much fuel it uses. Some people have company cars which are flashier than their own, making this a higher cost than necessary.
Some factors reduce the value, and therefore tax such as
- Having it part-time
- Contributing to its cost
- Lower CO2 emissions
There are several online calculators which allow people to estimate their tax bill when it comes to company car tax.
Leasing a company car
Choosing to lease your company car, as opposed to buying it offers several benefits, not least of all the tax relief. There will also be a smaller monthly cost, as opposed to an initial payout. There are also great benefits in peace of mind. Leased cars are only ever on hire, and are kept new. What this means is that the leasing company, such as Car4Leasing essentially own the car.This means they are responsible for its maintenance. As such, they often keep the cars refreshed and in good service, and you and your employees will always have a near to new car on the road. This means it is far less likely to have anything go wrong, since it is only ever going to be a few years old. Leasing offers tax relief, new cars and peace of mind, and as such we expect to see many more companies leaning towards leasing their company cars in the future.