Many choose car lease because it keeps money in the business and there are some benefits of claim vat back as well as other costs. But there are rules that determine what amount of VAT you can claim back, for example do you use your lease car for work or both work and pleasure.
The difference is being able to claim back 50% of VAT of 100%. The simplest way to figure out is your company car for business or both is, where is your lease car parked at night? If you or an employee takes that vehicle home at night, it will be declared as a vehicle used for both personal and business use even if the car is parked and brought back to work. This is because the journey to and from a fixed place for work, is deemed as personal use.
It is important to find out what your VAT liabilities and benefits are before entering any car lease or contract hire deal, as many liabilities are in place to ensure the company car does not become a free perk.
You can find out more from the Governments own pages on company cars and VAT
