Posts Tagged ‘business cars’
Business car leasing deals could help your business
Times are hard at the moment and it’s difficult enough just to keep a small business afloat, let alone spend a load of money on a new fleet of vans or cars. It’s certainly a nice idea and it could be just what your business needs, but with the credit crunch affecting large and small businesses alike it’s unlikely that many could afford to make such a commitment right now. It’s not really surprising that the motoring industry has been hit hardest of all and car sales are lower than ever, but believe it or not there could be another option for your business that could give you the best of both worlds.
Car leasing or contract hire agreements are a great way to make sure you always get the best deals out of running business vehicles. There are loads of benefits to opting for cheap car leasing instead of purchasing your vehicles outright, and it works out much cheaper in many ways – it’s not just that the payments are broken down into affordable chunks instead of paying for the whole vehicle at once, although that obviously helps. Most business contracts also include the vehicle’s servicing and maintenance costs in the monthly total, meaning you won’t have to foot the bill if anything goes wrong. And if your business operates a whole fleet of vans or cars, you’ll know how often that can happen.
The contracts take in to account your predicted usage of the vehicles and the monthly fees are decided accordingly, so whether you need a fleet of vans for your team to transport their equipment around town, or want to be able to show up to your important meetings in a flash new Audi car, leasing really is the best way to keep costs down. You don’t have to worry about the vehicles decreasing in value over time, and the best thing of all is that when the agreement ends you can simply swap it for a newer model.
Leasing new vehicles for your business at this time doesn’t just mean you’d have much less to worry about in terms of costs, but it could actually give business a boost too. Success is all about confidence and showing that you are still able to drive a brand new expensive car in spite of the recession lets people see that your business is still doing well, and if they believe in you then they are far more likely to put their trust in you. So if you always dreamed of being able to drive around in that swish BMW, now could be the time to embrace the moment and BMW car leasing could be the right choice for you.
New rules on company cars
From April 2009 it has been announced that there are new rules regarding tax relief on business cars. This could possibly make quite a difference to the capital allowances so it may be more practical to change your car sooner than you had anticipated.
This Pre-Budget report details allowances for cars are established on the vehicles carbon dioxide emissions. The ones mainly affected will be those acquired after the 31st March 2009 for companies and for sole traders and partnerships this will then apply after 5th April 09.
After April it will only be cars with co2 emissions that go up to 160g/km which will attract allowances at just 10%. Therefore buy a car before April and keep the higher rate of relief.
It is thought that even the more upmarket cars with emissions up to 160 g/km could be a better proposition to buy now. At present if you are contemplating buying a car which costs more than £12,000 writing down allowances will be curtailed to £3,000 a year. You will be entitled to a balancing allowance when you get rid of it. Long term the entire capital cost of the car is allowed for tax in its lifetime.
These new rules will remove the £3,000 limit plus the allowance. In the case of the expensive car which normally loses its value much more quickly than the rate of capital allowances, this will mean that there could well be a shortfall in allowances as in comparison to the cost of the car in its lifetime.
Under these new rules it appears that businesses that lease cars that are expensive should indeed benefit. The restriction on tax relief on lease rentals cars exceeding £12,000 will be replaced by 15% disallowance of lease rental payments on vehicles with co2 emissions that are above 160g/km. This will be regardless of their cost.