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Irrespective of how many vehicles your organisation has, the way in which they're funded can have a significant impact on the overall financial performance of your business. KVS can guide you through the options available and deliver a tailor made solution to relieve both the financial and administrative burdens of acquiring and operating new, or nearly new vehicles. Your Options Company cars now account for more than half of all new car sales each year, with the majority funded using contract hire to take advantage of the numerous cost-saving and administrative benefits. However, if your organisation is unable to reclaim VAT, or if you require high value cars (typically in excess of £25,000) it may make financial sense to retain ownership. Therefore, contract purchase offers all of the operational, managerial and administrative benefits of contract hire, together with the tax-efficient benefits of ownership. Offering similar VAT and tax benefits to contract hire, a finance lease could be an effective way of funding vehicles if you're prepared to take the risk and responsibility for resale at the end of the agreement. However, with an increasingly volatile used car market future cash flow could be jeopardised. If it's essential to retain your vehicles as company assets or if you plan to keep the vehicles for a long period of time then a hire purchase agreement could make sense. Whilst offering few benefits, this is the traditional and most straightforward form of funding and still favoured by some. Like hire purchase, lease purchase is another traditional funding method, but again offers few advantages. Its main benefit is that a proportion of the repayment (known as a balloon payment) can be left until the end of the agreement with the result that the monthly repayments are reduced. For those with cash reserves available, our outright purchase service could save time, money and hassle. However, with an outright purchase comes the risk and responsibility of resale, plus the disadvantage of tying up capital in fast depreciating assets. Tax Considerations To encourage drivers to turn to lower polluting, more environmentally friendly models, company car tax is now determined by a calculation taking into account vehicle emissions and tax list price. In the near future the tax on company vans is set to increase by a massive 600%.
You can calculate your tax
liability for the vehicle you are considering by using our
tax calculator. Quote & Info Line:
0845 166 2405 |
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