Contract Hire
Under Contract
Hire, vehicles are owned by the leasing company and are hired to you for
a set period of time and at a fixed monthly rate.
How Does It Work?
The monthly rental
charged is calculated based upon the cost of the vehicle, the contract
period and the anticipated resale value and mileage. Service and
maintenance costs are an option if required
(See
Fleet Management - Maintenance).
Under a Contract Hire agreement the leasing company retains ownership of
the vehicle at all times and therefore continues to absorb any
subsequent risks such as resale values.
How is it accounted for?
Rentals paid on vehicles under £12,000 are fully deductible against
corporation tax. For higher priced vehicles only a proportion of the
payments can be offset. Private use of vehicles only 50% of the VAT on rentals is recoverable.
Service and maintenance rental are fully recoverable.
Vehicles under Contract Hire are not recorded as assets on the balance
sheet.
Automotive Management Ltd,
Central Boulevard, Blythe Valley Park, Solihull, B90 8AG | 0800 389 6713
|
automan@auto-man.co.uk
