Looking at Business Car Manager this week we note an article examining a number of options to enable start-up business owners to finance their car. With more and more people starting businesses each year, adding to the already 4 million small businesses helping the UK economy, Business Car Magazine looked at three options:
The first is to use your existing car. With an allowance of 45 pence per mile for your first 10,000 miles travelled, falling to 25p thereafter, you also have to consider insurance, road tax, servicing, replacement parts and so on. The second option might appeal more to business owners who’d benefit more from a ‘pay on use’ style of motoring, and that is daily rental. Daily rental provides a reliable car that is unlikely to break down, requires no capital outlay and can be treated completely as a business expense.
The third form of vehicle usage looked at was short term hire, otherwise known as short term leasing or contract hire. With terms from 3 month car leasing to 6 month car leasing and 12 month leasing deals, it’s a simple way to fund a car as the business grows and it has the flexibility to change as the company’s strategy moves in line with growth. For sole traders, the entire business portion of the short term lease can be claimed as a business expense. For incorporated companies, the lease fee will be allowed as an expense, but the car will be liable to company car tax.
So there you have three options for motoring into your first few years of business. To find out more about short term leasing and to learn about our latest car leasing deals, please get in touch!