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Contract Hire
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A popular choice for Vat registered and limited companies that want minimum outlay and maximum control of costs, especially when the maintenance and relief vehicle options are included.
With this Vat beneficial financing package, one regular payment covers all risks including costs for depreciation and disposal for an agreed period of time and mileage. Road Fund Licence is included, but roadside assistance, maintenance and relief vehicle provision are options that can be added and charged to the rental payment.
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Frequently Asked Questions
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Who owns the Vehicle?
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Who carries the residual value risk?
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Who carries the ongoing maintenance risk?
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Is the vehicle on or off the balance sheet?
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Typically, how much cash is required up front as a deposit?
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Who arranges delivery and collection of the vehicle?
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Does the customer own the vehicle at the end of the contract?
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Can the monthly payments be offset in full against corporation tax?
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Assuming some private or home/office use of the vehicle, is there any benefit following the changes in VAT Legislation?
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Contract Purchase
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The Leasing Company
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The Leasing Company
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The Supplier, assuming a maintenance contract is taken
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This is off balance sheet
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Typically 6-7% of the purchase price (ie 3 months advance rental)
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Crystal Lease
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No
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Yes - 100% of the monthly rentals can be offset against corporation tax. For vehicles costing over £12000.00 a proportion is disallowed. In addition, 100% of maintenance payments may be fully offset
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Only 50% of the VAT can be reclaimed if the vehicle is used for any private mileage
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For companies with high value cars who would like the option to purchase the vehicles, but don’t want any depreciation risks.
The customer acquires the vehicle by paying fixed monthly instalments with the asset being shown on the company balance sheet and can either retain ownership at the end of the contract or hand it back. Contract Purchase has the added benefits of savings on maintenance and relief vehicles and comes with full rescue breakdown cover and road fund licence.
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Frequently Asked Questions
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Typically 6-7% of the purchase price (ie 3 months advance rental)
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Crystal Lease
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Yes if they pay the final lump sum at the end of the period or the vehicle can be returned.
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No, but Capital Allowances are available.
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None
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