So, we have new accounting rules for business cars. They are finally here. And apply to all new – not exisiting – business car expenditure.
The changes to corporation tax and to the expensive car leasing disallowance are subjects we’ve been rehearsing in Business Car Manager for many months.
We shall be following this up with a special downloadable pdf dedicated to the changes – and why contract hire will be so much more attractive for small businesses.
Because I think this is one of the key points to emerge from the new tax changes.
For those not familiar with the expensive car leasing disallowance – it’s how much of the contract hire rental you can claim against tax. Up until now there has been a restriction – the ‘half the excess rule’. I won’t go into its finer points here – but point you to our Total Card supported Knowledge Bank. Look up the download Taxation and the Business Car.
Anyway, the difference it makes to my current Audi A4 is an astonishing £101. Here’s the example:
Audi A4 2.0 TDI SE 4dr £22,745
Monthly net rental £418
Pre-April 09 tax change disallowance £101
Post-April 09 tax change disallowance £0
Contract hire quotation source: Concept Vehicle Leasing
That’s a big whacking £101 more that can be put against the P&L account (subject to private mileage, of course).
Anyway, if your business hasn’t considered contract hire as a method of running its business cars, then have a chat with your accountant or local BVRLA-approved leasing broker. You could be pleasantly surprised.
New rules benefit contract hire
