Tax Efficiency & Improved Cash Flow:

Lease payments are considered a business expense and may be fully or partially tax-deductible.

• VAT charged on the maintenance element can be reclaimed in full.
• Where there is some private mileage, 50% of the VAT on monthly payments may be reclaimed.
• Where a vehicle is used exclusively for business purposes, such as a pool car, 100% of the VAT is reclaimable.

No large upfront purchase cost is required; only the agreed monthly payments.

• Preserves working capital and supports other business operations.
  
  

End-of-Term Flexibility:

Choose whether to keep, sell, or replace the vehicle.

• Purchase the vehicle at a pre-agreed value,
• Refinance the residual and continue using it or
• Sell the vehicle (any profit after settling the residual often belongs to the business).

Ownership-like Control:

The business covers running costs such as fuel, servicing, insurance, and maintenance.

• Balance Sheet Impact: both the vehicle and the lease liability are recorded on the business’s balance sheet.
  
  
• Damage & Residual Value: there are no direct damage recharges. However, the business carries the resale/residual risk — if the vehicle’s value falls due to damage or high mileage, any potential equity is reduced.

Access to New Vehicles:

Makes it easier for businesses to upgrade to newer, more efficient vehicles, giving employees access to the latest safety, technology, and low-emission features — without the upfront purchase cost.