Your company leases a car or a fleet of cars in accordance with the business needs. Business lease cars can be given to your employees as a company car or salary sacrifice car and the appropriate tax for the benefit is applicable, or the car/s can be used as pool vehicles. Either way, a fixed monthly rental is paid by the business in exchange for the vehicles.

You’ll need to be a VAT registered company to lease a car through a business. A credit check, proof of entity and your companies house number are also requirements for business car leasing.

The company can claim back 100% of the VAT on payments made for a business leasing car if the vehicle is used for business purposes only. If the business lease car is also used for personal reasons by your employees, you can still claim VAT back, but only 50% of the VAT on the finance rental.

Multiple employees can drive the same business lease car providing they’re covered through the insurance policy. If the car is provided as a company car, then an employee’s partner or family member could also drive the vehicle, as long as you as the employer hold a copy of a valid UK driving licence for the additional driver.