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Business Car Lease Explained

Explore how leasing a car through your business can be beneficial for both your company and employees.

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 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 made by the business in exchange for the vehicles.  

In this guide you’ll learn about how business car leasing works, the requirements and how to introduce business car leasing, the benefits for you the employer and your employees and frequently asked questions.   

If you’re a UK-based business looking for a flexible vehicle leasing solution, click here to see how we can help.

How Does Business Car Leasing Work?

From a business perspective, you’re in control of the cars you lease and there’s no vehicle risk as you simply hand it back when it’s best for you or when the contract ends.This type of employee car benefit is classed as a company car and therefore the appropriate tax is applicable. 

How to lease a car through a business 

1. You choose the business lease car that works best for your needs. Selection, ordering and delivery all managed on the CBS Portal. 

2. The renewal process is easy and straightforward.  At the end of term, you can choose a new business lease car. 

3. The company uses the business lease car as required. You can choose to give the business lease car to an employee as a company car lease or use as a pool vehicle. 

4. The renewal process is easy and straightforward.  At the end of term, you can choose a new business lease car. 

You can attract the best talent by offering an attractive employee car benefit package. Removing the need for your employees to source and finance their own vehicle can be seen as an advantage.  

How to Get a Business Car Lease

The process of leasing a car through a business couldn’t be easier when you choose CBS as your fleet partner. Whether you have an existing car benefit package or not, tell us your main business objectives and we’ll design your own solution. 

By looking at what you do today and what you want to achieve in the future, we’ll help you determine the best set-up for your business. 

Our solutions can help generate financial savings for your business and employees, whilst reducing time and admin resource. 

Requirements For Business Car Lease

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.  

Benefits of Business Car Leasing 

Leasing a car through a business offers benefits for both you as an employer and your employees. 

Business Benefits

As an employer you can free up your own capital and save your business funds for what makes you money, as leasing a car through your business with CBS means we provide your vehicle funding. 

There’s no vehicle risk for your business, so there’s no need to worry about maintenance or the value of the car at the end of the lease, simply hand it back when it’s best for you or when the contract ends. 

From contract lengths to mileage, maintenance packages to insurance options, everything can be tailored to your individual needs. 

As this type of employee car benefit is classed as a company car, the appropriate tax of Class 1A National Insurance Contributions (NICs) is applicable. How much is due will vary from vehicle to vehicle depending on the P11D value of the business lease car and the Benefit-in-Kind (BiK) rate, which is based on the car’s CO2 emissions and electric range, if applicable.  

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 or 50% if the business lease car is also used for personal reasons by your employees.

Employee Benefits

Keep your employees happy by offering your company car entitled drivers a vehicle that is reliable and practical to run. The better the car, the more likely people will be to join your business.  

Employee benefits include: 
– Driving a brand-new car. 
– No monetary input or deposit needed. 
– Benefit from low BiK tax on Electric Vehicles (EVs). 
– Access to low-cost vehicle upgrades on EVs. 
– Hassle-free for lifetime of the car, with service and maintenance included.  
– Easy renewal at the end of the term. 

Company Car Lease FAQs

Still got a question about business car leasing? See if the answer is below in our frequently asked questions.   

Can I claim tax back on my lease car?

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 lase car is also used for personal reasons by your employees, you can still claim VAT back, but only 50%.

Can anyone drive a business lease car?

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.

Is it better to lease a car through business or personally?

As it’s possible to claim back some or all VAT on a business lease car, leasing a car through a business could be a more cost-efficient option. The service, maintenance and insurance is all included when leasing a car through a business via CBS, making business car leasing hassle-free.

Who insures a lease car?

Your CBS business lease cars are insured on through your company fleet policy.  

Who pays road tax on a leased car?

CBS are the registered keeper of your business lease cars and therefore are responsible for paying the road tax licence, and the cost is built into your lease price. 

Is Business Car Leasing Right For You?

Allows you to select the vehicles you want for your business, pay a fixed monthly amount and have the flexibility to choose when to hand the car back to us, removing any vehicle risk.   

Do you want to…  

1. Continue to offer traditional company cars to some drivers? 

2. Free up capital for your business?  

3. Reduce the P11D reporting on your fleet.​  

4. Have pool cars or the ability to move vehicles around your employee community.​  

If the answer is yes, get in touch today.

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