Contract Hire, sometimes referred to as an Operating Lease, is a long term rental agreement. Contracts range from 12 to 60 months and are tailored to the businesses requirements.
The Contract Hire Company reclaims the VAT on the original purchase, which reduces your monthly rentals (which are + VAT). Contract Hire is a very popular choice for VAT registered companies as they can claim back 50% of the VAT on the finance element for cars and generally 100% for commercials (subject to no private use, no exempt turnover and not being on the Flat Rate VAT Scheme).
On contracts with maintenance the VAT on the service element is 100% recoverable. One of the major benefits is that there are no disposal worries as the future value is underwritten by the leasing company. Another benefit of Contract Hire is that it is generally 'off balance sheet funding' (subject to legislation change) which means it can improve your gearing ratio (assets to borrowing ratio) and therefore possibly your borrowing ability in the future.
Newbury Leasing is authorised and regulated by the Financial Conduct Authority, we are a credit broker and not a lender. Registered No : 690568.
| Registered in England & Wales with company number : 4051316 | Data Protection No : Z7832313 | VAT No : |
Newbury Leasing are a credit broker and not a lender, we are regulated by the Financial Conduct Authority. Registered No : 690568
Warning: Failure to maintain payments may result in termination of your agreement and the vehicle being returned. This could affect your credit rating and make it more difficult to obtain credit in the future. For more information and help, go to www.moneyadviceservice.org.uk
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