Although your business will never actually own the vehicle, finance leasing make many of the benefits associated with ownership available to your business, whilst at the same time offering significant tax advantages.

For the duration of a finance lease agreement, the vehicle will be shown as a leased asset within your balance sheet. Rentals are treated as a revenue expense and may be offset against your taxable profits. Furthermore, rentals can be tailored to match the cash flow of your business, with a 'balloon' rental being used to defer part of the vehicles initial cost.

If your business is registered for VAT, 100% of the VAT payable on the finance element of the rentals may be recovered where the vehicle is either a van, or a car used solely for business purposes. Where the vehicle is a car used for business and private mileage, then only 50% of the VAT payable on the finance element of the rentals may be recovered.

At the end of the agreed lease period, the vehicle is sold and the proceeds are used to clear any 'balloon' payment. If the sale proceeds do not cover this amount, then the shortfall must be made up by the lessee. Should the proceeds exceed the 'balloon' then the difference will be refunded as a rebate of rentals.

Key Benefits

• A low initial outlay, usually of 3 months advance rentals
• Rental patterns tailored to suit the cash flow needs of your business and a 'balloon rental' will typically be agreed between the lessee and BCC Fleet
• Road Fund Licence and roadside assistance are included as standard within finance lease agreements
• Maintenance is not normally included within finance lease agreements
• Rentals may be offset against taxable profits, improving the cash flow and tax position of your business
• If registered for VAT your business may reclaim all, or some of the VAT payable on the finance element of the rentals
• At the end of the lease, the lessee sells the vehicle to an independent third party as an agent of BCC Fleet
• Where the sale proceeds exceed the 'balloon rental', the difference will be refunded as a rebate of rentals
• If the sale proceeds do not cover this amount, then the shortfall must be made up by the lessee