Looking to lease a car through your business?

Business contract hire (BCH) is a specific type of leasing agreement built for business owners who want to lease a vehicle for themselves or their employees. In general, BCH agreements work in much the same way personal contract hire (PCH) leases do – the main difference being you can claim up to 100% of the VAT back on your monthly payments with a BCH deal.

The processes behind business and personal leasing are largely the same but with a few key differences:

• There are different eligibility requirements for business leasing.
• Business leasing offers tax benefits of up to 100% VAT relief, depending on how you use the vehicle.
• Both business owners and employees can get a business lease in the business’s name.

You can apply for a business lease as a limited company/partnership, sole trader, or LLP. You’ll need to be the director of the organisation, which needs to have been incorporated for at least three years and be based in England, Scotland or Wales.

You may need to act as a guarantor against any BCH deal you take out, which means you’ll need to be a permanent resident of Great Britain (mainland only).

You can claim up to 100% of the VAT back on the monthly payments of your business lease, depending on how you use the vehicle.

If your lease vehicle is used exclusively for commercial purposes, you can claim the full VAT amount back. If you’re using your lease vehicle for both business and personal travel, you’ll be able to claim 50% of the VAT back. Add a maintenance package to your business lease and you’ll be able to claim 100% of the VAT back on the monthly maintenance payments, regardless of how you use the vehicle.

Additionally, if you take a business lease on an electric or low-emissions vehicle, benefit-in-kind (BIK) tax rates tend to be lower. Lease payments can also be deducted as business expenses in many instances, reducing your taxable income.

You certainly can. There are plenty of benefits that come with a business lease on an electric or hybrid vehicle: lower benefit-in-kind (BIK) rates, lower running costs and boosting your business’s sustainability profile, to name a few.

If you’re looking at an electric business lease specifically, you might want to consider our salary sacrifice options, too. Speak to a member of our team to find out more.

We don’t do part exchanges directly but we can buy your car from you, and you can use the value you receive against your new business lease.
If you’d like more information about this, speak to a member of the team or visit Hippo Car Sell to get a free and fast valuation.