Business Contract Hire explained by Clear Car Leasing
These days, there’s more and more people becoming self-employed and just like everyone else in business, you will more than likely need a car.
As a self-employed person, you might be wondering whether it’s possible for you to lease a car through a business contract as opposed to a personal one.
The option to lease a car through a business contract is possible if you qualify from any of the following:
- A partnership
- A sole trader
- A VAT registered business
- You have a Limited Company
- A PLC
- A LLP (Limited Liability Partnership)
So basically, if you’re self-employed you are eligible for business leasing as you are a sole trader but there’s a process you must go through before you can lease a car.
You might have to provide your latest set of accounts – which will hopefully look positive and then you may have to provide some of your recent bank statements.
Proof of ID and an address will have to be provided, also a credit check will be required.
Business Contract Hire means you pay a fixed monthly fee for the duration of your agreed lease period. The mileage allowance you choose will be charged as such and be included in your fixed monthly payments.
At then end of your contract you simply hand the car back and as long as you haven’t gone over your agreed mileage allowance there’s nothing more to pay.
Lastly, be aware that you might have to pay company car tax if you lease a car through your business but you might be exempt if you:
- Are the proprietor of your own business
- Are a partner or in a partnership
- Are a member of a Limited Liability Partnership (LLP)
What this means is that if you’re self-employed, you don’t have to pay company car tax but if you become a Limited Company in the future you will then have to pay.
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