Company Car Loans for individuals and Companies.
Radius Finance provide company car funding solutions to companies and individuals all over the United Kingdom. We work closely with our clients to arrange cost effective solutions for the acquisition of vehicles for business.
Finance Lease Purchase
As with Hire Purchase, ownership of the asset remains with the finance company. Ongoing rentals are paid over the fixed primary term. All operating responsibilities and costs rest with the company. At the end of the primary term, the company will usually have the option to purchase the car, return it to the lease company or extend the lease to a secondary period.
The tax treatment is broadly the same as contract hire, above, except that the total cost of the lease is spread over the expected term of the agreement. This is by way of capitalising the asset and allowing the notional depreciation and finance charges. The same CO2 disallowance considerations apply as for contract hire. Once again, half of the monthly input VAT cost can be reclaimed.
Advantages: Readily understood and available through main dealers.
Disadvantages:Lease liability (and asset) shown on balance sheet
This is the simplest and most common acquisition method, whereby spare cash resources are used to make an upfront purchase of the vehicle. All running responsibilities and costs rest with the company.
Normal running costs pass through the profit and loss account and are allowed for tax. Recovery of input VAT on the cost of the car is not permitted unless the car is used for 100% business use. Capital allowances are available based upon the cost of the car. The cost of the car does not qualify for the Annual Investment Allowance. A writing down allowance (restricted to £3,000 where the car cost over £12,000) of 20% (where CO2 emissions are less than 160g/km) or 10% (where emissions exceed 160g/km) is given each year, on a reducing balance basis. No balancing allowance is available on disposal. Low emission cars (below 110g/km) qualify for 100% first year allowance.
Advantages:Simple and popular, with maximum control.
Disadvantages: Responsible for all ownership, running and sale issues.
This form of purchase spreads the cash flow effects of the transaction over the life of the asset. Ownership passes when the final instalment has been paid.
The tax treatment is as per the aforementioned Cash Purchase.
Advantages:Most common/understood form of borrowing for vehicle purchase.
Disadvantages:Risk of repossession if company defaults on payment plan
Request a quotation, make an online application or contact us for further information.