Car Leasing

Car leasing allows you to get the use of a vehicle without taking ownership of it.

You borrow a vehicle from someone for a fixed period (the 'term') in return for a monthly payment.

During the 'term' the car is still owned by the leasing company and just rented by you.

What's In Car Leasing Rentals?

During the car lease term the rental you pay to the leasing company covers their costs to operate the vehicle, plus a profit too.

In other words, you pay for ...

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Company Car Benefit

Company car benefit is used to tax the value to you of having a car provided by your employer.

What's the taxable value of a company car?

You need to multiply the car's List Price by a percentage figure based on the car's Carbon Dioxide ('CO2') emissions.

The higher the combined list price and CO2 emissions of a company car, the higher the annual taxable beneft (and vice versa).

So What Is 'List Price'?

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Van Leasing

Unlike car leasing (which tends to be based around fixed annual mileages), van leasing is often more complex.

Annual mileages can be a lot less predictable for vans, so instead businesses typically have a choice between finance leasing or contract hire.

What's the Difference?

In a van contract hire agreement you agree a fixed annual mileage for the van and just pay back depreciation according to the forecast mileage, plus interest on the price of the van.

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Tax Relief for Private Cars

If you use your own car on travel for your employer you will normally get tax relief on the car's running costs.

If you give up a company car to take a cash allowance you will normally stop paying company car tax and instead pay tax on your cash allowance, but you can then offset some of your car's running costs against tax.

How Is Tax Relief Given?

Tax relief is given through a system called 'MAPs' (HM Revenue & Customs' Mileage Allowance Payments).

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