What is Beneficial for business? To buy or to lease a car?

Any assets you buy/lease on business name has its own benefits. Decision to buy or lease purely depends upon who you are planning to get vehicle for and how it will be used. There are various taxation matters that we have to look into while making this decision. To give you an overview, you need to check the impact on VAT, Corporation Tax, social security costs for the company. Again, if company buys a car for its director who is also an owner of the company, then his/her personal tax too need to consider. Usually, it is difficult to ascertain which is beneficial, but the fact that leasing the car will be an off-balance sheet asset and will not add to the value of the business. Further, it may cost more in terms of interest/ charges paid for leasing that vehicle. However, all the costs are considered as allowable expenditure for business purpose and will give you accurate overview of profits that your business makes. With more than 30 years of experience in advising small businesses in and around London, Affinity Associates can give you unparalleled service at a reasonable price. Call us or email us for free consultation on how we can help you manage your accounting and taxation affairs.