▶ **Designed for [business car lease deals](https://www.leaseloco.com/car-leasing/business-leasing)**

▶ **Also available on [van lease deals](https://www.leaseloco.com/van-leasing/search)**

▶ **Easy eligibility**

▶ **Tax and VAT benefits**

Being self-employed or a sole trader can involve a lot of driving.

Which is where self-employed business leasing comes in (officially known as Business Contract Hire).

In this comprehensive guide, we'll cover how it works, how it benefits you, and what requirements you'll need to fulfil (trust us, it's not a lot!).

## Do I Qualify for a Business Lease Deal as a Sole Trader?

Yes. You'll need to be at least 18 years old and be classed as self-employed or a sole trader.

You are self-employed or a sole trader if you:

* Work for yourself
* Own a business
* Agree prices for your work
* Work for multiple clients 

## What's the Process?

**1)** Choose the vehicle that takes your fancy

**2)** Adjust the deal for your preferred mileage, initial rental and contract length

**3)** Click the Phone icon or the ‘Get my quote’ button

**4)** Apply for finance with our leasing partners 

**5)** Sign your lease agreement

**6)** Await delivery and enjoy

![View of night streetlights from the inside of a car.](https://assets.leaseloco.com/blog/Sole_trader_business_lease_2.jpg)

## What Documents Do I Need for a Business Lease?

* Personal details (name, address, date of birth, property status)
* Proof of ID
* Business information
* Business bank account info

It's relatively uncommon, but certain funders might also ask you to provide bank statements (usually 3 months’ worth).

Similar to a personal car lease, you will also undergo a quick credit check in order to be approved by the finance company who provides the funding for the deal, as they need to be assured that you will be able to make the monthly payments.

Due to the above, it can sometimes be helpful for your business to have at least some financial history, though it's not the end of the world if yours doesn't. You may just be asked for further information.

## What Income Do I Need?

There's no set number here, because it more or less depends on what vehicle you're leasing and on what terms, so perhaps the correct answer would be - **enough to allow you to keep up with the monthly payments**. 

As such, the finance company will likely need assurance that your company account contains the funds needed to cover the cost of the lease, which is also why the credit check is important. 

If you're struggling in terms of budget, there are a few things you could do such as opt for a cheaper business lease or lower the mileage on the lease contract, thereby reducing the price. 

## Benefits of Self-Employed Car Leasing
* Fixed monthly payments

* No depreciation worries 

* Claim back tax and VAT (more on this below)
* Cheaper vs PCP*

* Road tax (Vehicle Excise Duty) included

* Full manufacturer's warranty included

* Breakdown cover

* The lease costs will be ‘off balance-sheet’

*See our disclaimer on [how we calculate our leasing vs PCP rates](https://www.leaseloco.com/pcp-savings)

## Tax and VAT Benefits

Here's the really good bit . . .

As a sole trader or self-employed person, you can claim back **100% of the VAT if you use the vehicle for business purposes only**, or **50% of the VAT if you use the vehicle for both business and personal use**.

You can also claim the monthly payments and the initial rental cost as a **tax deductible-expense** in your tax return, meaning that the complete amount can be written off against your tax bill.

## Do I Pay Company Car Tax If I'm Self-Employed?

Great news, you don't.

You will be exempt from paying company car tax as there is legally no difference between you and your company.

Generally speaking, you only need to pay company car tax if you’re an employee working for a company which has a business vehicle that is used on the job or for personal journeys.

Exemptions from company car tax include:

* Partner of a business
* Owner of a business
* Member of Limited Liability Partnership (LLP)

## Can I Claim Back Any Mileage?

Yes, you can claim back mileage, though the process is a bit different from claiming mileage on a personal lease.

For business leases or company cars, mileage is reimbursed through a Fuel or Mileage Allowance. This involves calculating vehicle expenses based on a flat rate set by HMRC.

This is known as **Simplified Expenses**, with a fixed amount based on the number of miles driven.

![A car speedometer.](https://assets.leaseloco.com/blog/Business_Sole_Trader.jpg)

## Can I Use the Car for Personal Journeys?

Sure can.

But if you use the vehicle for both business and personal use, you'll only be able to reclaim 50% of the VAT. And that's true on any business lease, not just if you're self-employed or a sole trader.

Still definitely better than not being able to claim back any of the VAT, as is true with a personal car lease. 

## Can I Add My Own Signs to the Lease Vehicle?

We get it. You want to advertise your business, and signs are a great way of doing that.

Well the good news is that a lot of leasing companies do permit you to add signs, branding and logos. However, you must still get their permission before doing so as there may be certain restrictions on modifying the vehicle.

Do note as well that due to car lease [fair wear and tear regulations](https://www.leaseloco.com/blog/leasing-fear-of-fair-wear-and-tear-6f9df364db0b), any signs and logos will need to be removed from the vehicle by the end of the lease, and without causing excess damage.

## Summary

That about wraps it up.

Taking out a business lease if you're self-employed is not only possible but hugely beneficial in terms of your finances, tax and, well, just about everything.

So if you're ready to reap those benefits, get yourself a self-employed car lease by heading on over to our [business car lease deals](https://www.leaseloco.com/car-leasing/business-leasing) and [van lease deals](https://www.leaseloco.com/van-leasing/search) now.


## FAQs About Self-Employed Car Leasing

### Is it worth leasing a car if self-employed?

Leasing a car as a sole trader or if you're self-employed can be worth it due to the VAT benefits (you can claim 100% of the VAT back if you use the vehicle for business purposes only, or 50% if you also use it for personal journeys), and due to being able to write off the payments as a business expense in your tax returns.

The fact that you get road tax and the full manufacturer’s warranty included works in your favour as well.

### Can you lease a car if you own a business?

Yes, you can lease a car and qualify for a business car lease if you own a business, work for yourself or are a sole trader. Your trading history isn't hugely important to funders, but you will need to provide some basic documentation and pass a credit check in order to be accepted.

Looking to lease a car as a self-employed individual? This guide provides helpful tips and information to navigate the car leasing process successfully.

Self-Employed Car Leasing Guide | LeaseLoco

Self-Employed Car Leasing Guide

We're here to tell you why a business car lease is so much better than buying a business car outright.

Of course, being a car lease comparison site, we would say that, wouldn't we?

But wait, hear us out . . .

There are some objective, real-life reasons for why it works out better.

## What is Leasing?

We all know about buying – you pay for a vehicle upfront and it's yours. No mysteries there.

But what about this exotic thing called leasing?

Well, not so exotic at all actually.

If you lease, say, a property, you take a lend of it, and it's the same with car leasing. Just think of it as a longer (and in proportion cheaper) form of renting a car.

You usually pay a deposit or upfront fee (although we do have plenty of [no deposit deals](https://www.leaseloco.com/car-leasing/no-deposit) which don't require that!), and you then pay fixed monthly payments for an agreed amount of money across an agreed amount of time.

## How Does That Differ From PCP/Hire Purchase?

Well, unlike those methods of finance, you don't have the option to buy the vehicle at the end of the contract. Instead, you simply hand it back to the leasing company at the end of the business lease contract. 

Which is a good thing, as it means you won't be paying any interest. And that's one of the reasons why the monthly payments on average tend to work out cheaper than with PCP/Hire Purchase - which, oh yeah, is the other big difference!

## What is the Difference Between Business Leasing and Personal Leasing?

Pretty simple, really.

A personal lease is taken out by you as an individual person, whereas a business lease (also known as a business contract hire) is taken out in the name of your company.
![A work desk in a business environment.](http://assets.leaseloco.com/blog/business-vs-personal-leasing1.jpg)
## Why is a Business Car Lease Cheaper Than a Personal One?

Business car leasing tends to be cheaper than personal car leasing because personal lease deals always include VAT within the cost, whereas if you are using a company car completely for business use, you can claim back the entire 100% of the VAT - saving you a hefty amount of buck.

Or up to 50% of the VAT if you are also using the company car for some personal use, which is still a big figure.

## Can I Take Out a Business Lease?

Sure can.

You will be asked to provide proof of your business, so things like bank statements, accounts, proof of ID, address, etc. 

Similar to personal leasing, with business leasing you will also need to pass a credit check and be approved by the finance company responsible for funding the deal. They need to be sure that you'll be able to afford and keep up with the payments.

Because of that, it's best for your business to have some financial history in order to be accepted. So [if your business is fairly new](https://www.leaseloco.com/guides/business-car-leasing/new-business-car-leasing), it may be a bit more of a challenge to get approved - but still very much a winnable challenge. You may just be asked for more information, such as a director's guarantee.

## Pros and Cons of Leasing a Business Vehicle

✔️ Minimal upfront costs compared to buying a vehicle outright

✔️ Fixed monthly payments that don't change throughout the lease

✔️ Road tax and the full manufacturer's warranty included

✔️ Lets you switch to a new vehicle every so often, taking advantage of the latest models and technology

✔️ No hassle of having to sell the vehicle on

❌No option to buy at the end

❌ Credit checks mean small chance of not being accepted for the lease

## Pros and Cons of Buying a Business Vehicle

✔️ There might be a large initial investment, but depending on the price and your financial situation, owning outright can potentially result in cost savings over the course of the vehicle's lifespan

✔️ No mileage limit

✔️ No credit check

✔️ Ownership of the vehicle can build equity for your business, which can be leveraged for future as an asset on your balance sheet

❌ Big upfront payment

❌Hassle of having to sell the vehicle on

❌ Road tax typically not included

## Summary

Making the choice between between leasing and buying a business car is a decision that requires a complete analysis of every factor: financial, operational, and strategic. Ultimately, leasing one from a leasing company gives you that initial lower cost, convenience, and tax benefits, without you having to commit to owning the vehicle, which is a weight off your shoulders.

Stay tuned to our blog/feed for more insightful articles on car finance, business leasing, and managing your payments!

And of course, check out all of our [business car lease deals](https://www.leaseloco.com/car-leasing/business-leasing) today for your next company car.

## FAQs

### Is it cheaper to lease a car through a business?

Yes, business leasing oftentimes works out cheaper than personal leasing as the monthly payments don't include VAT. Drivers who use the car exclusively for business use can claim up to 100% of the VAT back – or up to 50% if the car is also used for private use.

### Why do companies lease rather than buy cars?

Many companies choose to lease rather than buy cars as it's usually a more cost-effective alternative to buying outright, particularly if  funds are tight. With leasing, you make fixed monthly payments that don't change. So could be the wise move for your business as well.

Explore the pros and cons of business car leasing versus buying. Make an informed decision for your company's vehicle needs.

Business Car Leasing vs Buying | LeaseLoco

Business Car Leasing vs Buying

Whether online or through friends, salary sacrifice is something you've probably heard about. Or if not, then it's about time, because salary sacrifice is good news. For you and your finances.

As a leasing company, we'll preach the benefits of leasing any day of the week, and we'll also preach about the benefits of salary sacrifice. That's because we want to do all we can to help make your motoring life that little bit easier.

Not only does leasing a brand new car cost less than through PCP, but when you do it through salary sacrifice, you're making even more savings.

Let's find out how it works.

## How Does a Salary Sacrifice Scheme Work?

Salary sacrifice involves giving up part or all of your income in exchange for a non-cash reward – in this case, a brand spanking new lease car.

What happens is that you'll enter into an agreement with your employer to reduce your gross salary (meaning your salary before tax is applied) in return for a lease on the vehicle of your choice.

## Can Salary Sacrifice Save Me Money?

But what's the difference between salary sacrifice and just straight-out leasing a car by yourself?

Well, the great thing is that salary sacrifice car leasing offers both you and your employer savings on income tax and National Insurance contributions (NIC) in what is the ultimate Win/Win situation.

That's because the amount is taken before income tax and National Insurance are applied, so employees and businesses save on the contributions they pay. Not only that, but the set monthly amount will give you fully comprehensive car insurance, road tax, breakdown cover, MOT, maintenance, replacement tyres and accident assistance all included.

Obviously, every employee is different, and every salary can be different, so the amount of savings you make can vary. But it can be up to 60% when compared with the cost of a personal lease taken out by yourself.

## Can I Salary Sacrifice Two Cars?

It's a bit more uncommon, but yes, there's nothing stopping you from taking out more than one car under the salary sacrifice scheme as long as your employer approves the request.

You also need to make sure that the salary which is being sacrificed (in this case, yours) doesn't fall below minimum wage as a result of leasing two cars instead of one. Not only would that put an enormous strain on your finances, it would also be illegal.

## Benefits of Salary Sacrifice for Employers

* Rewards existing employees and helps attract potential new ones
* No need to provide consumer credit to your employees
* Lower National Insurance Contributions (NICs)
* Improves company image and sustainability credentials by encouraging low-emission motoring through the promotion of electric vehicle salary sacrifice

## Benefits of Salary Sacrifice for Employees

* Save money!
* Save on income tax and National Insurance contributions
* Fixed monthly rentals. No up-front payment
* Full maintenance, breakdown cover and road tax included
* Only pay BIK (benefit-in-kind) tax on a car
* No credit check required

## Any Downsides?

There's no obvious disadvantages to a salary sacrifice scheme in itself, but it could prove problematic in certain life situations.

Let's suppose you leave your job or get laid off during the lease term agreement, meaning that the remaining costs will be left with your employer who will need to either cover the monthly payments themselves or pay an early termination fee. Which is a bit of a kick in the teeth for them.

Or let's suppose you're applying for credit or making a mortgage application. Now, because your salary is reduced through salary sacrifice, you might end up getting disapproved for credit or receiving less on a mortgage. That's because even though you're making overall savings through salary sacrifice, gross salary is what mortgage lenders care about, and you're giving part of that up.

Salary sacrifice might also be problematic if you're on a lower salary, as it's illegal for your take-home salary to fall below the national minimum wage. So just make sure it doesn't fall below the threshold.

## Lean, Mean and Green: Salary Sacrifice Works Best with Electric

Yep, a salary sacrifice is most effective with electric vehicles because the benefit-in-kind (BIK) rate was only 1% in 2021/22 and then will be capped at 2% until 2024/25. For example, if you were looking to get a brand new [Tesla Model 3 lease deal](https://www.leaseloco.com/car-leasing/tesla/model-3) through a salary sacrifice that was X amount per month, through this scheme X amount would be deducted from your gross salary every month. You would then receive your salary and pay tax and National Insurance contributions from this new reduced salary. This means that you are paying less tax than you would if you had the car amount paid through your salary as normal.

For a fixed monthly amount taken directly from your gross salary, you as an employee can receive a fully electric or hybrid vehicle (less than 75g/km of CO2) vehicle, therefore saving overall on income tax and NIC.

You as an employee do not own the vehicle, and the responsibility of the car rests with the employer. The employee is therefore subject to benefit-in-kind tax (BIK) similar to a company car, when using a salary sacrifice scheme. This is where the low BIK rate of 2% (up to tax year 24/25) on pure electric vehicle introduces significant financial savings.

A salary sacrifice car scheme is by far the most cost-effective way to drive an electric car.

## What Happens at the End of the Agreement?

Same as with a standard lease agreement.

At the end of the salary sacrifice scheme, you simply hand the vehicle back and either opt out of salary sacrifice or enter into a new agreement. As long as the terms of the contract have been upheld and you haven't made an absolute pig's ear of the car, there's no extra charges to worry about.

Obvious note: unlike with PCP or Hire Purchase, you're never going to own the vehicle at the end of the agreement, so you don't have to worry about selling the vehicle on or deciding what to do with it.

## Summary

So, is it worth the sacrifice?

The data would say yes. Tax and National Insurance savings don't lie. At the end of the day though, the decision is yours to make. Just remember that you are giving up part of your salary, so if you're thinking of getting a mortgage or similar anytime soon, it's important to get the timing right.

But if you think that a salary sacrifice scheme would be a good move, here at LeaseLoco we have the hottest [car leasing deals](https://www.leaseloco.com/car-leasing/search) on the market for you to choose from. Your dream car could be just a few clicks away . . .

Happy leasing, and happy salary sacrificing!

## FAQs

### Do I need to tell HMRC about salary sacrifice?

Nope, not a whisper. There is no requirement for employers to inform HMRC that you have adopted a salary sacrifice arrangement.

### Can I salary sacrifice with bad credit?

Yes, as there's no personal credit checks. So you could have the worst credit rating on the planet and still enter the scheme.

### Is EV salary sacrifice worth it?

We think so! It definitely works out better than salary sacrifice for non-electric vehicles.

### Can I lease a car through salary sacrifice?

Certainly can. In fact, it's one of the best ways to lease a car.

### Does salary sacrifice avoid tax?

Not completely, but because you're exchanging part of your salary for the vehicle, it means you will be paying less of it.

Wondering what the salary sacrifice car scheme is and whether it's right for you or your employees? We reveal the pros and cons in this helpful guide.

What Is Salary Sacrifice Car Scheme? Updated 2023| LeaseLoco

What Is A Salary Sacrifice Car Scheme?

Taxes. Everybody hates them, and they always find a way to sneak up on you.

Except when it comes to business car leasing. Here things become a bit more generous, especially compared to personal car leasing.

Due to the fixed low monthly costs, the simple process and the positive tax implications (which have the main benefit of making your lease payments tax deductible),  [ business car leasing deals](https://www.leaseloco.com/business-leasing) can help cut costs for your business.

So, what are the tax benefits of business car leasing?

## Company Accounts: Improves Your Balance Sheet

You don't own a lease car, which, guess what . . . means that any car lease payments will appear ‘off balance sheet’ and won’t appear as either an asset or liability on your business balance sheets. That can be a great draw to make your company accounts look stronger to investors when looking for credit.

## Claim Back VAT On Your Car Lease Payments

The best perk is that your payments are VAT-recoverable.

If you use the car for **business use only**, you will be able to reclaim **100% of the VAT** on your monthly lease payments, significantly saving costs. Or if you use the car for **both business and personal use**, you'll be able to claim **50% of the VAT** back, which is still a lot better than personal car leasing – where you get to claim a grand total of 0%.

Of course, your business will need to be VAT-registered in order to qualify for these benefits.

## Claim Back Mileage Costs and Maintenance Packages

More of a bonus here, as any [excess mileage charges](https://www.leaseloco.com/blog/excess-mileage-charges-explained) (that's when you go over your contractual yearly mileage) and [maintenance costs](https://www.leaseloco.com/blog/should-i-add-maintenance-to-my-lease-a36ece4d8772) are also VAT-recoverable. Which is also why it can sometimes actually be cheaper to pay for the excess mileage charges at the end of your lease than to opt for a higher mileage at the start of your business leasing agreement.

![A car interior showing the controls.](https://assets.leaseloco.com/blog/Business_Leasing_Tax_Interior.jpg)

## Can I Do Business Leasing as a Limited Company?

Yes, you will be able to lease a car through a limited company with business leasing. This option is available for many kinds of businesses, including partnerships, charities and sole traders.

To be eligible, you must:

* Be currently trading
* Have a suitable profit level and/or income
* Pass a credit check

## Reclaim Costs Through Corporation Tax

If you're a limited company with a business car lease, you can reclaim up to 100% of your business car lease payments through your corporation tax. As mentioned before, this also includes additional costs which are part of the lease agreement, for example maintenance packages. 

The tax treatment depends on the CO2 classification of the vehicle:

**Vehicles with CO2 emissions under 50g/km:** The full amount of your lease payments can usually be deducted as a business expense

**Vehicles with CO2 emissions greater than 50g/km:** Only 85% of your leasing costs will be tax-deductible 

Vans are an exception though, because businesses can claim 100% of the costs regardless of emissions.

## Do I Have to Pay Company Car Tax if I'm Self-Employed?

No, you won't have to pay company car tax. In legal terms, there's technically no difference between you and your business.

Just a reminder, you're self-employed if you:
* Own a business and work for yourself
* Work for multiple clients
* Provide tools and equipment to finish a job
* Agree on fixed prices for your work

[Find out more about self-employed business leasing](https://www.leaseloco.com/guides/business-car-leasing/self-employed-car-leasing).

## How Much Benefit-in-Kind Tax Do You Pay On a Leased Car?

The benefit-in-kind rate will be calculated using a number of factors:
* **The CO2 emissions of your vehicle**
* **Your earnings**
* **The P11D value (market price) of your vehicle**

On that basis, the benefit-in-kind rate can be worked out in a calculation whereby you multiply the P11D value by the CO2 emissions band percentage of the car, and then multiply this by your personal income tax band percentage.

But you should be able to find out much quicker by simply heading over to the [HMRC tax calculator](https://www.gov.uk/calculate-tax-on-company-cars), than if you calculate it yourself.

The benefit-in-kind rate for electric and hybrid cars was previously fixed at 2%, but will **increase by 1%** in the 2025-26, 2026-27 and 2027-28 tax years. This will bring rates to a maximum of 5% for electric cars and 17% for hybrids.

Basically, you can save money on benefit-in-kind tax by opting for a business lease on hybrid or electric vehicles.

## What Is Benefit-In-Kind (BIK)?

Benefit-in-kind (BIK) tax is a tax charged on employees or directors who use a company car for personal purposes, including during business car leasing arrangements. It’s essentially a tax on the value of the private use of a company vehicle.

A company car is a great incentive where your employer provides you with a vehicle to use as a benefit on top of your annual salary, usually to be used for both business and private use. As this is on top of your annual salary, the government places a tax on company cars, known as Benefit in Kind (BIK) tax, that you will need to pay. If the company car scheme includes fuel then you will also need to pay tax on this fuel allowance.

## Business Car Leasing With LeaseLoco

Ready to take advantage of business car leasing and its generous tax benefits? Then take a look at our [business car leasing deals](https://www.leaseloco.com/business-leasing) and start your car leasing journey.

Not after a business lease car? Head over to our [van lease deals](https://www.leaseloco.com/van-leasing/search) (which are also classed as business deals), and as the UK’s biggest car lease comparison site, we are confident we'll be able to find you the perfect deal.


## FAQs about Business Car Leasing Tax Benefits

### Is business car lease tax deductible?

A business car lease is tax-deductible, and you'll reap the main VAT and tax benefits as long as your company or business is VAT-registered. Specifically, you'll be able to reclaim **100% of the VAT** on your monthly payments if you use the car for business purposes only, or **50% of the VAT** if you use the car for both business and personal use.

### Is it better to lease or buy a car self-employed?

Leasing requires access to less upfront cash, and includes perks like road, tax, breakdown cover and the full manufacturer's warranty. Plus, you won't have the hassle of having to sell the vehicle on in the future. In general, business car leasing can be a tax deductible expense, making your life easier.

Understanding the tax implications of business car leasing is crucial for financial planning. Learn the key considerations and implications to ensure compliance and optimize tax benefits for your business.

Business Car Leasing Tax Benefits | LeaseLoco

Business Car Leasing Tax Benefits

When it comes to a lease vehicle, you've got the choice of either a personal car lease or a business car lease. As a company, you'll want to choose the latter.

But how does business car leasing work, and why is it the best option for your company? 

We explain all here.

## What is Business Car Leasing?

Business car leasing (or Business Contract Hire) is a **contract agreement whereby you take out a car for an agreed length of time and then return it at the end of your lease**. 

You pay regular, fixed monthly payments for the pleasure, and what you pay is largely determined by how much the car is expected to depreciate (decline in value) over the term of your lease. You can choose to put down a higher deposit to make your monthly payments more manageable.

Business car leasing is mostly the same as personal car leasing, except that you enjoy more VAT and tax benefits (more on that in a bit), and it’s your business details that go on the lease rather than your own personal details. 

## Sounds An Awful Lot Like PCP?

There's a few key differences.

For starters, leasing usually works out cheaper than PCP, which is why we include a 'savings vs PCP' figure attached to many of our deals ([find out how we calculate our leasing vs PCP savings figures](https://www.leaseloco.com/pcp-savings)). 

Plus, the vast majority of lease vehicles are brand new whereas PCP includes used vehicles as well, although [used lease cars](https://www.leaseloco.com/blog/can-you-lease-a-used-car) are slowly making their way into the leasing market.

Another big difference with leasing is that there's no final balloon payment at the end to own the car, so you don't have to worry about paying that followed by the hassle of selling the car on. With business leasing, you simply hand the vehicle back, and as long as there's no [excess mileage](https://www.leaseloco.com/blog/excess-mileage-charges-explained) or damage that breaches [fair wear and tear regulations](https://www.leaseloco.com/blog/leasing-fear-of-fair-wear-and-tear-6f9df364db0b), you'll have nothing left to pay.

In short, leasing is not only more affordable but also more flexible for giving you instant access to a vehicle without the pressure of ownership somewhere down the line.
![A car interior.](http://assets.leaseloco.com/blog/BusinessCarLeasing3.jpg)
## Is Business Leasing Cheaper Than Personal Car Leasing?

Often yes, because unlike with personal leasing, you pay less company car tax and receive VAT benefits.

You can claim sums of tax back with business leasing. The amount open for you to claim depends on the level of CO2 emissions that the vehicle produces. You’ll only be able to claim back 80% of the total if your car produces higher than 130g/km CO2 emissions, whilst vehicles with lower emissions enable you to claim back the full amount.

If you use the car exclusively for business use, you can reclaim **up to 100% of the VAT**. Or if you use the car for both personal and business use, you can reclaim **up to 50% of the VAT**. Either way, that's quite a significant saving.

Of course, do bear in mind that your company needs to be VAT-registered in order for you to claim these perks. 

## Can I Take Out a Business Lease If I'm Self-Employed?

Yep, you can choose to take out a personal or a business lease if you're a sole trader or self-employed. 

But unless you’re VAT-registered, you won’t be able to take advantage of the potential VAT savings above.

## Benefits of Business Leasing

In addition to the tax and VAT benefits mentioned above, here's what else you're gaining from:

* Fixed monthly payments that don't change

* Brand new car with modern tech and features

* Can be used for personal as well as business use

* Optional low initial payment 

* The leasing company takes the hit from the vehicle's depreciation, not you 

* Road tax, breakdown cover and the full manufacturer's warranty are all included

## How To Get A Business Car Lease?

Same way as you would with a personal car lease deal.

In order to arrange a business car lease, you need to:

1. Via our [business lease deals](https://www.leaseloco.com/car-leasing/business-leasing), find a vehicle that takes your fancy

2. Adjust the deal for your preferred deposit, mileage and lease length

3. Make an enquiry and receive contact from our leasing partners 

4. Provide relevant documents and pass any credit checks

5. Await delivery

6. Drive and enjoy

## Am I Eligible For a Business Contract Hire Agreement?

Your business will need to be registered either as a public limited or a limited company, and you’ll have to provide certain proofs such as bank statements, proof of address, ID of the company director, and go through credit checks (more on that in a bit).

Finance providers will expect your business to be one of the following:

* Sole trader

* Partnership

* Public Limited Company (PLC)

* Limited Liability Partnership (LLP)

* A local authority (education, social services etc.)

* A limited company

* VAT-registered business

* Embassy

* Charity

Apart from being one of the business types described above, you will also be asked to provide proof of your business, so things like bank statements, accounts, proof of ID and address of the company's main director.

## What Business Credit Score Do You Need To Lease A Car?

Similar to a personal lease, you will need to pass a credit check and be approved by the finance company providing the funding for the deal. That's because they need to be assured that you will be able to make the monthly payments. 

Like with a personal car lease, business car lease deals are subject to the approval of the finance company providing the funding for the deal.

That being the case, most finance providers require your company to have a credit score considered 'fair' to 'good' (so around the 700 mark) in order to have the best chance of passing the credit check.

Which means that if you're the company director and have poor personal credit but your business has strong credit, you may still be able to get approved for business car leasing.
![Close-up of a credit score.](http://assets.leaseloco.com/blog/BusinessLeasingCreditScore.jpg)
## What If My Business is New?

Most providers prefer for your business to have a financial history of at least a few months in order to be accepted for a lease, but if not, then there's still a good chance that you could be accepted.

Being able to make the monthly payments in the future is the most important thing, rather than your company's past necessarily. So you may be asked for further supporting documents, like providing a director’s guarantee or management accounts.

## Get a Business Lease Car with LeaseLoco

That's business car leasing explained in simple terms. 

Any of that sound good?

Then sift through our [business car leasing deals](https://www.leaseloco.com/car-leasing/business-leasing), pick the one that takes your fancy, hit the Call icon or the ‘Get my quote’ button and you'll be straight in touch with our leasing partners.



## Business Car Leasing FAQs

### How does business vehicle leasing work?

Business car leasing (or Business Contract Hire) works much the same way as personal leasing. You pay regular, fixed monthly payments in exchange for leasing a car, either with or without a large initial payment (deposit). Then, once the lease contract is over, someone simply comes and collects the vehicle after carrying out a final inspection. And if you haven't driven excess miles or damaged the vehicle beyond fair wear and tear, you'll have nothing left to pay.

### Is it worth getting a business lease car?

If you enjoy low monthly payments and not having to worry about the hassle of selling a car on, then business car leasing is absolutely worth it. Also, business lease deals give you tax and VAT benefits that you don't get with personal car leasing.

### Can I use a business lease car for personal use?

Yes, vehicles taken out on business car lease deals can be used for your own personal use. However, if you choose to do this, you will only benefit from being able to claim back 50% of the VAT, rather than 100% of the VAT.

If you're planning to lease a car for business purposes, this guide will tell you everything you need to know to get started.

Business Car Leasing Explained - What Is Business Leasing? | LeaseLoco

Business Car Leasing Explained

# How To Choose The Right Company Car For You
[Business leasing](/business-leasing) is one of the most popular options for employees and employers to get themselves a brand new car for low monthly payments. Once you’ve decided that leasing your next car is for you, the fun begins and you get to pick which car you’re going to get! While it is exciting picking your next car, it can be overwhelming with millions of company car lease deals available and different car makes and models to choose from. 

When you’re getting yourself a new company car, you want to make sure you pick the right one. So we’ve put together this guide to help you with key considerations and some of the most popular lease company cars. 

## Key Considerations When Choosing A Company Car

### Budget
First and foremost, you need to have a think about what your budget is for a new company car. We’re confident that at LeaseLoco, there is a deal for everyone’s budget, whether you are looking for [cars under £200 /month](/car-leasing/budget/200), or if you’re looking for a [7 seater SUV for under £400 /month](/car-leasing/search/3c5d4e89facaf8e071d50ff8b3d2afaa). You may want to have a think about your budget for your car and any additional packages, including maintenance and servicing. 

### Fuel type & mileage
You may also want to consider what fuel type would be best for you, which can depend on the running costs of each, the mileage you will do, whether you do a lot of city driving etc. You should check a car’s fuel consumption and insurance costs in addition to the monthly payments you will need to pay.

The mileage you do will also be a key consideration as this will affect your monthly price for the car, and will meant that if you pick a suitable mileage you won’t need to pay excess miles at the end, or fall so far under your mileage that you could have saved money by opting for a lower mileage. 

For diesel vehicles, you will need to pay a higher BIK tax rate than other fuel types which can be costly. That said, if you do enough miles, then the fuel savings may outweigh the additional tax amount for a diesel car. 

### Electric car BIK rates
An electric car business lease deal can be a significant cost saving due to the company car tax rates. At the moment, if you have a company car, you will need to pay a tax called Benefit in Kind tax, as it is a benefit on top of your annual salary. However, the government introduced new tax rules so that any electric vehicles did not have to pay any of this tax for 2020/21 and only 1% in 2021/22, meaning a potential huge saving for going green. 

### What you will use the car for
You will need a car that matches your lifestyle and plans, considering things like:

*	Will my whole family fit in the car?
*	Do I have off-street parking for an electric wallbox charger?
*	 What type of roads will I be mostly driving on?
*	Will I be doing a lot of city driving or long distances?

You will want to consider all aspects of your life and what you will be using the car for. We want to make your search as easy as possible, so on our search page you can filter down on the car body styles, seat numbers, mileage and more to find something that suits you best. 

### Any spec preferences
Another thing to consider is what features of the car are important for you to have whether it be parking sensors, heated seats, built-in sat nav, tinted glass etc. From this, you have a couple of options to consider. You can either get a trim level that includes the features you are looking for, or you can opt for a factory order and add on any optional extras such as these, and compare the costs of both and see which offers the best value. 

## Best & Most Popular Company Cars 2022
One of the biggest considerations is the company car tax you will need to pay, which is why opting for a company car with low or now tax can be cost effective. We have compiled a list of the top company cars to lease for you to give you an idea of some of the better options to choose. 

*	[Volkswagen ID.3](/car-leasing/volkswagen/id3)
*	[Volvo XC40](/car-leasing/volvo/xc40)
*	[BMW 330e](/car-leasing/search/a4964af256ba09fb5dea2eaded25e4be)
*	[Tesla Model 3](/car-leasing/tesla/model-3)
*	[Mercedes-Benz A250e](/car-leasing/search/8225fbee39618e6d5f994646827f56fb)
*	[KIA e-Niro](/car-leasing/kia/e-niro)

### Volkswagen ID.3 

The Volkswagen ID.3 is a great all-electric option for a company with low BIK tax, meaning a financially attractive option. It’s quite spacious inside and can be fun to drive too. You’ll find that it is significantly cheaper than a Tesla Model 3, but offers a similar range with certain battery options. For example, the cheapest Model 3 only offers 254 miles range, however the ID.3’s 77kWh model offers 341 miles! So this car is an affordable option with a pretty good range. 

### Volvo XC40 

The XC40’s electric and hybrid models (Recharge) have also made our list, being a roomy stylish SUV. If you’re heading on long journeys, the XC40 can be a really comfortable drive. The 216bhp T5 PHEV is one of the most popular options, offering a 13% BIK rate in 2021/22 and has 28 miles of electric range. 

### BMW 3 Series 330e

The BMW 330e is a go-to for many executive company car drivers, being comfy and fun to drive. While the petrol and diesel BMW 3 Series BIK rates can be up to 37%, the 300e is only at 11%, meaning an obvious choice for those looking for an executive saloon. You will also be able to cover up to 37 miles on fully electric power and still have the car’s rear-wheel drive or optional four-wheel drive on the road. 

### Tesla Model 3

The Tesla Model 3 has had a lot of attention in the past couple of years and has gained numerous awards. We’re not surprised considering the Long Range trim can do 0-62mph in just 4s, has a 360 miles range, seats 5 people and you will be paying almost nothing in tax for it.

### Mercedes-Benz A Class A250e

The Mercedes A Class has always been a popular choice in the UK with its previous efficient petrol and diesel engines. However, now that Mercedes has spun this into a PHEV offering, it is a great company car option. It is a smaller than a few of the other options mentioned here, but is still a stylish drive. The A250e offers up to 45 miles of pure electric range and a low BIK rate of just 6% compared to it’s diesel version of 34% BIK, making a great saving for business leasing.

### KIA e-Niro 

This electric SUV has one of the best ranges, making it a great company car choice with a low BIK tax rate. It can travel up to 282 miles with its battery and also offers an incredible 451 litre boot capacity, making it a really spacious interior. You’ll find that the hybrid version of the KIA e-Niro will have cheaper monthly payments to lease, but the fully electric aspect means you’ll pay far less in tax than you would with the hybrids. 

There are plenty excellent choices for a company car, but we think these are some of the best options to choose from. Luckily, the filters on [LeaseLoco’s search page](/car-leasing/search) make it really easy to find a car that is suitable for you and meets all of your needs.

You may need to take a bit of time and think about all the key considerations for getting a new company car lease. You could save a significant amount on tax by opting for an electric car, but is the car’s range long enough for your needs?                           

If you’re really unsure about what company car you want to go for, you can always try and narrow down your choices to 2 or 3 options and head to your local manufacturer’s dealership and take them for a test drive to see what you think and what your heart jumps to!

## FAQs	

### Can you choose any car as a company car?
This will depend on your company. Every business may have different options or potential limitations for your company car, meaning you may not be able to pick the exact model you like. This is why a company car allowance may be a better option if picking the exact car is important to you. 

### Does my company car count as income?
A company car is considered to be a non-cash benefit for an employee, so it does not count as income. Similar benefits include accommodation, mileage allowances and subscriptions. However, as it is a non-cash benefit, you will need to pay tax on it if your employer lets you use it for personal use as well as business use (Benefit in Kind tax).

### Should I accept a company car?
A company car can be an incredible benefit to have as you’re not personally tied into a financial contract and your employer is responsible for all of the driving costs. So it can be great for those who drive a lot of miles. However, if you picking the exact spec and trim is important to you, it may be a better option to have car allowance as you will be more likely to get the vehicle you want this way.

### Is a company car a good perk?
A company car can be a pretty good perk to have. Your employer is responsible for all of the driving costs, so there is less for you to worry about, although you will need to pay tax for this benefit. So, it is certainly worth considering cars that have a low BIK rate to keep this cost down low.

Picking the right car to lease for your business can be tricky. This guide highlights everything you should consider to help you make the right decision.

How To Choose The Right Company Car For You | LeaseLoco

How To Choose The Right Company Car for You

A set of wheels can be essential to getting your new business up and running, but to get a set of wheels, your business has to be . . . not new?

Or so you thought. 

The prospects are actually much brighter, as business car leasing is open to more or less any business, no matter how long you've been trading. Yes, even if your credit score's a tad, shall we say, under par.

We tell all below to make your car leasing journey as smooth as it can be.

## Car Leasing: What is Business Contract Hire (BCH)?

Business car leasing, or business contract hire (BCH), is essentially a long-term rental agreement. It offers the lessee (that's you) the freedom to drive a brand new car for a set time without the financial burden of ownership. Then at the end of the lease, you simply return the vehicle.

Compared to PCP, business leasing is cheaper on average and doesn't give you the hassle of worrying about selling the car on or paying a hefty balloon payment at the end (which many PCP users don't choose to pay, anyway). 

Business leasing differs from personal leasing in that it's your business details which go on the lease agreement, rather than your own personal details. And of course, as well as using the car for personal use, you can now also use it as part of your job e.g. driving to meetings or between offices, or long road trips to attend conventions and conferences.

[Read more for a more detailed explanation of business car leasing](https://www.leaseloco.com/guides/business-car-leasing/business-leasing-explained)

## Can My New Business Lease a Car?

You're in luck, as most types of business can apply to lease a car, no matter how long you've been trading.

A minimum trading history of 2 years is generally preferred, though that figure's not set in stone. What's more important that you're able to afford the monthly payments, so if you can, then that's more than a good start.

The main types of organisations eligible for business car leasing include:
* Limited Companies (Ltd.)
* Public Limited Company (PLC)
* Self-employed/sole trader ([find out more about self-employed car leasing](https://www.leaseloco.com/guides/business-car-leasing/self-employed-car-leasing))
* Partnership
* Limited Liability Partnership
* VAT-registered and non-VAT-registered companies
* Charity

Not one of the above? Then reach out to our leasing partners when you enquire and they will be able to tell you if you are eligible.

Taxi or uber companies won't be able to secure a lease through us, however. The constant driving would mean more wear and tear etc., resulting in greater vehicle depreciation (loss in value), meaning the leasing company would likely be out of pocket down the line. However, specialist leasing companies do still exist for those.

## What Documents Do I Need for a Business Lease? 

When you enquire on your chosen vehicle, our leasing partners will generally ask you for the following information:

**Company details**: Name, address, company registration number (if applicable), email, contact number

**Director's information**: Name, date of birth, address (possible)

**Business bank details**: Bank name, sort code and account number

To qualify for a business car lease deal, you'll also need to be in possession of a full, valid driving license.
## Additional Information That Might Be Required

The following may also be required if you are a new business, though there's no guarantee that you will be asked for them:

* 3 months of bank statements
* Up-to-date financial statements or management accounts
* Director's guarantee (Limited Companies only)

![A pen on top of some documents.](https://assets.leaseloco.com/blog/documents.jpg)

## What If I Don't Have Any of Those Documents?

We get it, you're a new business. You might not have any of that to hand.

In which case, the finance company may ask you for a realistic cash flow forecast instead.

## Can My Business Lease a Car With Bad Credit?

Leasing companies want to make sure you're likely to pay what you say you'll pay, which is why the credit check forms such an important part of the eligibility check, and not just for business lease deals. 

Funders obviously prefer you to have a 'fair' to 'good' credit score, but [it's still very possible to get a business car lease with bad credit](https://www.leaseloco.com/guides/contracts-and-finance/can-you-lease-a-car-with-bad-credit).

Apart from providing extra info like a director's guarantee, you could try one or more of the steps below.

## How Can I Improve My Chances If I Have a New Business With Bad Credit?

**Choose a shorter lease**: Instead of going for a 2 or 3-year contract, consider a 1-year business lease. That way, you are essentially borrowing less of the money, meaning that the leasing company will consider you as less of a risk 

**Put down a higher initial rental**: Again you are paying for more of the lease upfront and borrowing less of the money on credit

**Put down a guarantor**: A guarantor is someone (usually a family member) who will 'guarantee' to step in in the event that you default on your payments. Of course, make sure to get their permission first 

## How Long Does the Credit Check Take?

Most funders should process your credit application within 2 working days at most, though during busy periods this could occasionally stretch to 5 working days. 

## How Long Does It Take to Build Enough Credit for a New Business Lease?

It's a big question, as this can differ depending on company circumstances, but in most cases, building up a healthy credit file typically takes 2 to 3 years.

And remember, as you carry on making the payments on your current business car leasing deal, you're gradually improving your credit score for the next time you take out a car lease (or take out anything else credit-related for that matter).

## Do I Need a Big Deposit?

Not at all.

There's plenty of business car lease deals available with a low or no deposit.

A smaller deposit is ideal if you don't have a large sum of money available to put down upfront, and its not as if your monthly payments will increase as a result. The overall amount that you pay stays the same over the course of the lease, whether you put down a large or a small deposit.

On the flip side of the coin, a bigger deposit could make your monthly payments more manageable. All a matter of your own circumstances and needs.

[Check out our no deposit business car lease deals](https://www.leaseloco.com/car-leasing/search/304289ec05deacbddd7a55263201716f)

![A piggy bank with coins scattered around.](https://assets.leaseloco.com/blog/New_Business_Deposit.jpg)

## Benefits of your Business Lease

* Fixed monthly lease payments

* Cheaper vs PCP ([find out how we calculate this](https://www.leaseloco.com/pcp-savings))

* Brand new car that would cost thousands of £££s to buy upfront

* Payments will be "off balance sheet"

* Road tax and the full manufacturer's warranty included

* [Tax advantages and savings](https://www.leaseloco.com/guides/business-car-leasing/business-car-leasing-and-tax), including on corporation tax

* Ability to reclaim VAT (100% if you use the car for business use only, or 50% if you use the car for both business and personal use)

* No hassle of selling the car on

## Get That New Car Feeling More Often

Yep, every single vehicle displayed in the business car lease deals on our site is brand spanking new, meaning you and your employees will be driving premium vehicles. 

## Summary: Lease with LeaseLoco

Yes, business car leasing does have some hoops to jump through, but less than you might think, so it’s still accessible even if your business is fairly new. Even having a bad credit score won’t automatically disqualify you.

Business car leasing is still the best way to get behind the wheel of some of the newest makes and models and the most tech savvy electric vehicles. 

Interested? Head straight to our [business car lease deals](https://www.leaseloco.com/car-leasing/business-leasing) and get started.

## How Our Car Leasing Process Works

**1)** Pick the vehicle that takes your fancy

**2)** Adjust the lease terms to suit your preferred mileage, initial rental and contract length

**3)** Contact our leasing partners by clicking the Call button or 'Get my quote'

**4)** Finalise lease and sign your leasing agreement

**5)** Await delivery of your brand new car

**6)** Drive and enjoy!

## FAQs about Business Car Leasing Eligibility

### What is a business car lease?

A business car lease (Business Contract Hire) is essentially a long-term rental arrangement. This agreement enables businesses to use a car or fleet for a predetermined period, usually between 2 to 4 years, in exchange for fixed monthly payments with an optional initial rental payment.

Unlike buying a vehicle outright, leasing doesn't give you the burden of the full purchase cost and the depreciation of the asset. Instead, once the lease term ends, the vehicle is simply returned to the leasing company.

### Can a new business get a car lease?

Car leasing for new businesses is very possible, as there's actually no strict rule about having a certain amount of trading history. But to give yourself the best chance, it's generally preferred that your business has a good credit score and that you can demonstrate a stable income through business bank statements, as well as providing company details such as your registration number. If you're a new business, you may also need to provide additional documents, such as a director's guarantee.

### Is it better to lease a car through business?

This will depend on your circumstances. Business leasing and personal leasing (Personal Contract Hire) are both rather similar. That said, business leasing can be cheaper than personal leasing as you can claim back VAT on the monthly payments which can be a cost-effective way to lease a car.

Wondering if you can lease a vehicle for your new business? This guide highlights everything you need to know.

New Business Car Leasing | LeaseLoco

New Business Car Leasing

Whether you're a small start-up or a large corporation, business car leasing is a fantastic way to save money on a brand new set of wheels due to the benefits offered, from **lower upfront costs** to **tax advantages** and more.

That's true compared to other finance options like PCP, but also in comparison to personal car leasing as well.

Let's go through all the benefits. 

## What is a Business Car Lease?

Business car leasing (Business Contract Hire) gets its name for a reason – it basically works like a long-term vehicle rental for businesses.

Similar to personal car leasing (Personal Contract Hire), business car leasing is a type of car finance agreement. The key difference being that the lease is set up in your company’s name rather than your own.

Beyond that, the process is practically the same. You simply choose a brand new car, tailor the lease agreement to your preferred mileage, initial rental and contract length, then submit your enquiry, take delivery of the lease vehicle and start the monthly payments. 

## Included With Business Car Leasing

Some quick wins . . .

✔️ **Breakdown cover:** So you're not left stranded by the roadside in case of any unexpected mechanical faults 

✔️ **Full manufacturer’s warranty:** So you don't have to pay for the part(s) that caused it 

✔️ **Road tax:** So you don't have to waste time applying for it every year

## Flexible Lease Terms

Need a short or a long-term lease? Then you can take out a lease agreement for just 12 months, or for as long as 4 years.

Or how about high mileage? Our business car leasing deals offer you up to 35k miles per year  – and if you do end up driving more, you just pay for the excess mileage at the end of your contract (usually charged at a rate of 7 to 30p per mile).

And depending on the leasing company, you'll also usually have the freedom to [extend your lease](https://www.leaseloco.com/blog/can-you-extend-a-car-lease) or [terminate your lease early](https://www.leaseloco.com/blog/car-lease-cancellation-rights). So if your circumstances or business needs change, just check your contract or give your leasing provider a ring.

![A business conference room.](https://assets.leaseloco.com/blog/business.building.1.jpg)

## Cheaper vs PCP

Mainly because you're only paying for the car’s depreciation over the course of a lease, rather than paying for the full value of the car (like in PCP).

PCP payments also tend to be higher because they cover part of the car’s value in case you want to purchase it at the end of the agreement (known as the **balloon payment**).

All reasons why we include a 'savings vs PCP' figure on the lease deals on our site, just to make it clear what you're saving.

(For a full explanation on how we calculate our leasing vs PCP rates, please visit: [https://www.leaseloco.com/pcp-savings](https://www.leaseloco.com/pcp-savings))

## Lower Upfront Costs Than Buying

After all, maybe you can’t afford to put down £10,000+ to buy a new car outright.

And because of how fast new cars drop in value, that's probably not a good idea anyway.

On our business car lease deals, you don't have to put down a large deposit if you don't want to. You can even choose **no deposit** (1 month), meaning you'll only be putting down £200 upfront in the case of certain vehicles.

## Improved Cash Flow

Business leasing is considered a form of credit, meaning that your company’s valuable cash is then freed up elsewhere for expenses in other areas.

On the other hand, buying a new car upfront requires a large sum of money/capital, meaning you'll have less available cash compared to if you lease.

## No Depreciation Worries

Let's say you were to buy a new car instead of leasing one.

Chances are it would lose over half its value in the **first 3 years**, and a large chunk of that would be from you just driving off the forecourt. Then when you finally come to sell it, it’s now worth a lot less than what you bought it for. D'oh!

Not so with leasing.

Here, your monthly payments largely cover how much the vehicle is expected to depreciate in value, and because you're not selling the car at the end of the agreement, you don't have to worry about what it'll eventually be worth. That's the leasing company's problem to figure out.

![Bottom view of a skyscraper.](https://assets.leaseloco.com/blog/business.building.2.jpg)

## No Big Balloon Payment at the End

Speaking of the end of your contract, you also don't have to decide whether you want to make that optional big balloon payment to own the car, like what you get in PCP contracts. And not everyone who takes out a PCP deal ends up paying the balloon payment anyway.

No. At the end of your lease, you return the car and take out a new one, or simply walk away.

## Access to a Brand New Car

Yep, every single business lease car on our site is brand spanking new.

And brand new means shiny new paintwork and a vehicle that's fully up-to-date – which is only going to reflect positively on your business.

Less chance of a breakdown, less loss of time and £££. 

And remember, your business lease car is covered by a [full manufacturer’s warranty](https://www.leaseloco.com/blog/lease-car-warranty) just in case!

## VAT Tax Benefits

The main advantage that business leasing has over personal leasing – which doesn't give you any VAT or tax benefits.

If it's a VAT-registered business and you use the car for business use only, you can claim back a whopping **100% of the VAT** on your monthly business car lease payments. 

Or if you use the car for both personal AND business use (which is a bit of a perk in itself), then you can still reclaim **50% of the VAT** on your monthly payments.

## Providing a Staff Perk

Happy workers, happy business, right?

Offering a company car is a great way to enhance your employee benefits package. Business leasing makes it simple to provide this perk, though employees will need to pay Benefit in Kind (BiK) tax on the car.

The tax amount is determined by HMRC and depends on factors like the car’s model and emissions. Choosing a low or zero-emissions vehicle can significantly reduce the tax rate, making it an attractive and cost-effective option for eligible staff.

## Take Out a Business Lease with LeaseLoco

Sound good?

Then head over to our [business car leasing deals](https://www.leaseloco.com/car-leasing/business-leasing), pick your perfect business lease deal and get started.

We’ve got your business covered.



## FAQs

### Is it worth leasing a car through my business?

Business car leasing is a smart choice if you want to drive a new car every few years while keeping your cash flow in check. Plus, you can reduce costs by reclaiming up to 100% of the VAT and benefiting from low company car tax rates.

### Why is business car leasing cheaper?

The main reason why business car leasing is cheaper than personal leasing is due to the potential VAT and tax savings. With a business lease, your business can claim back 100% of the VAT if the vehicle is used solely for business use, or 50% of the VAT if the vehicle is used for both business and personal use – which is still a significant saving.

### Can I use a business leased car for personal use?

You can use a business lease car for both business and personal use, but not for personal use alone. Although when it comes to tax and VAT, you'll typically only be able to reclaim 50% of the VAT if you use the car for both business and personal use.

### Can my business lease a car?

To lease a car, your business will need to be registered either as a limited or a public limited company, and you’ll have to provide certain proofs too, including ID, bank statements and a director's guarantee. You'll also need to pass a basic credit check.

Business car leasing offers numerous benefits such as cost savings, flexibility, and access to newer vehicles. Learn more about the advantages of business car leasing for your company.

Business Car Leasing