Friend of mine is thinking of getting a BMW 520d on leashire,costing around £370 a month,2 years and limited to 10k in the year..

He has a small LTD company,and his accountant has told him that he can claim 40% of the lease payment back against his tax..

I would have thought that he would get taxed on this personally??Costing £xxxx per week??

Can anyone clarify the situation as i havent a clue!!

What are the downsides of using this 2yr leasehire deal?

TIA

 

There are lots of options:-
* Contract Hire
* Personal Contract Purchase
* Personal Contract Hire
* Daily Rental
* Hire Purchase
* Lease Purchase
* Finance Lease
* Sale and Leaseback
* Contract Purchase

Obviously there are pros and cons with each option. For example with a lease you cannot simply decide to end a contract when you want without incurring big penalties, sometimes equal to the amount you would have paid them had the contract run to term.

With purchase schemes you own (or get the right to purchase) the vehicle at the end of the contract period.

There's plenty of info on the internet, too many options to reply on a thread like this. I suggest your friend does a search and reads it up for himself.

His accountant should be able to explain the pros and cons of each option to him.

 

He said it was a lease purchase,but would hand it back after 2 years and get another..

I personally was thinking about how much it would cost him weekly as this would be classed as a company car??He didnt seem to think that he would be taxed at all on it,indeed he thought that he will be able to offset 40% against his tax bill at the end of the year..