BORDER VEHICLE CONTRACTS
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Funding Methods
Broadly speaking, the various funding methods are designed to reduce costs, assist cash flow and budgets, whilst minimising taxation. The right method for you will very much depend on your circumstances and choice of vehicle. Here's our cheat sheet with all the answers.
Below is a table of all the finance options available in clear, straightforward language.
| Hire or Lease Purchase | Contract Purchase | Finance Lease | Contract Hire | Personal Contract Hire | Personal Contract Purchase | |
| Will we own the asset in the end? | Yes | Optional | No | No | No | Yes |
| Are the rentals tax deductible? | Interest only | Interest only | Yes | Yes | N/A | N/A |
| Can capital allowances be made? | Yes | Yes | No (1) | No (1) | N/A | N/A |
| Is rental linked to residual value? | No | Yes | No | Yes | Yes | No |
| Is the VAT on rental reclaimable? | No | No | Yes | Yes (2) | No | No |
| Are service & maintenance included? (3) | No | No | Optional | Optional | Optional | No |
| Is there a mileage limit? (4) | No | No | No | Yes | Yes | No |
| Who disposes of the vehicle? | You | You | Optional | Us | Us | You |
| Does driver pay benefit-in-kind tax? | Yes | Yes | Yes | Yes | No | No |
Notes:
(1) You claim the monthly rentals, rather than the capital cost.
(2) You claim 50% of the finance element and 100% of any maintenance element, 100% on both on commercials.
(3) Maintenance option is there mainly for the convenience of high mileage and large fleet operators who want to budget for everything.
(4) You set the mileage limit and the monthly rental alters accordingly. Mileage can be altered during a contract.
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