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Van Leasing as a Business Benefit

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Van Leasing As a business Benefit

As company cars become less of a benefit for both businesses and employees, van leasing is becoming the most beneficial option for those who need company vehicles. Whether self employed or a business owner van leasing can be beneficial in many ways.

Business Expenses

The cost of leasing a van is classed as a business expense. If you purchase a vehicle it is classed as an asset, if you bought it through HP then the HP company is classed as a creditor. Compare this to a regular monthly payment that is classified as a business expense and as you don’t own the van there is no asset on your balance sheet and no creditor either. Benefit in kind charges are based on a flat rate for vans as opposed to using the list price and co2 emissions used for cars. Fuel benefit charges are more favourable for vans than they are for cars, so if you use a company fuel card this could make a huge difference.

Maintenance

The costs of maintaining a vehicle are something that must be taken into consideration. If you don’t have your vehicle on the road you lose business and reputation very quickly. Van leasing can give you the option to add a plan for maintenance and breakdown cover to be included in your monthly payment. This allows you to budget for vehice expenses without having to worry about sudden bills if something should go wrong.

Fuel

With the changes in taxation fuel cards are becoming less and less of a benefit. Fuel receipts again are easily put through as a business expense. Ensure you keep business receipts separate from any fuel bought for personal use.

Car or Van?

With todays vehicles there can be an amount of ambiguity regarding how vehicles are classified as to van or car. HMRC have a page which gives some information here (https://www.gov.uk/government/publications/hm-revenue-and-customs-car-derived-vans-and-combi-vans) Using a van leasing company will ensure that there is no ambiguity.

Business or Personal?

According to HMRC a business journey is a trip:

1.made as part of work (eg a service engineer travelling between appointments)

2.to a temporary workplace

Vans used for ‘insignificant’ private journeys are exempt, eg making a slight detour to pick up a newspaper on the way to work.

You won’t need to report your van if it’s all of the following:

1.available for use and used by more than 1 employee

2.available to each employee because they need it to do their job

3.not ordinarily used by 1 employee to the exclusion of others

4.not normally kept at or near employees’ homes

5.used only for business journeys - limited private use is allowed, but only if it’s incidental to a business journey, eg driving home to allow an early start the next morning

Van fuel for private journeys

There’s a standard value of £594 that you’ll need to report.

This can be reduced if:

1.the employee can’t use the van for 30 days in a row

2.your employee pays you back for all their private fuel

3.you stopped providing fuel during the tax year

As can be seen from the information from HMRC above, a van can still be used for private use as long as you report the use and private fuel is not paid for by the company.

All in all, with so many permutations of taxation and benefits, van leasing is becoming by far the easiest option for the savvy business owner. All the benefits of purchasing a van with very few of the pitfalls.

 

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