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Make The Right Choice - An accountants guide to choosing a vehicle

After considering the points below, you can use the 'power search' function on our website to narrow down the vehicles which suit your requirements.

Kilsby & Williams Chartered accountants have compiled some key points which you should consider before deciding on your vehicle.

Business v Personal

The decision whether to opt for business or personal leasing is often a balancing act, but ultimately for most people cost is the main driver. The following factors should be considered as part of the overall decision-making process:

•Business and private mileage;
•List price;
•Running costs: fuel, insurance, maintenance;
•Tax and VAT relief.

Choosing A Vehicle

•Choosing cars with low emissions is not just better for the environment: it also saves tax.
•Employees that have cars available for private use suffer a taxable benefit in kind. In order to minimise the cost of this, it is advisable to select a low emissions vehicle: ideally one with emissions below 50g/km. This also is good for the employer as the national insurance cost is lower.
•Diesel cars are subject to a 3% supplement when working out the value of a benefit in kind, making it more expensive for employees. Against this, a business must take into account the cost of fuel when comparing diesel and petrol cars. Ideally, hybrid vehicles would be both tax and cost effective.

Tax Benefits
•100% VAT recovery on maintenance & 50% VAT recovery on hire charge for taxable businesses on contract hire.
•100% tax deduction for contract hire charges or depreciation if finance lease, on cars with emissions less than 130g/km.

Benefits of Contract Hire/Finance Leasing
•Cars lose considerable value in the first 3 years and annual costs of servicing and maintenance can be prohibitive, especially as cars get older. Rather than owning cars that have nominal re-sale value and are expensive to maintain, hiring or leasing a car enables businesses to factor in anticipated costs in budgets and forecasts.

If you would like more information regarding Kilsby & Williams and the services they offer, please visit their website or contact 01633 810 081.

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Posted on 1st September 2016 at 3:56 PM

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