Contract hire, pcp, finance, which is best

[donnk]

HP - you own it (you get the V5), 100% AIA allowance. You pay all the VAT up front and then a monthly with or without a balloon. All expenses are vat re-claimable. You may have to pay personal tax for private use.

 

 

Contract Hire - you dont own it, you can claim 100% of the monthly against profits and 100% of the VAT if no private use otherwise 50% VAT

 

Lease - similar to HP but you dont get it on the books or pay all the VAT upfront.

 

The long and the short of it is, if you think you will look after it and sell it on for above trade in price in 3/4/5 years, you have enough dollar up front for 10% and all the VAT then HP is good road.

 

If you dont have the up front dollar then contract hire gets you in a motor cheap but they will crawl over it at the end of term and if you have banjo'd it expect bills.

 

As long as you VAT registered either way isnt a problem as you reclaim it, if your turnover is below the VAT threshold then you will be looking at contract hire anyway i would guess.

[Steve Bullman]

 

 

Contract Hire - you dont own it, you can claim 100% of the monthly against profits and 100% of the VAT if no private use otherwise 50% VAT

.

How do they decide its 50%?

[donnk]

How do they decide its 50%?

 

its HMRC they decide and thats it. No argument!

 

Fiddle them at your peril, they have more powers than the rozzers.