Business Contract Hire

Business Contract Hire = Minimum Outlay.

Business Contract Hire requires minimum outlay and gives maximum control of costs, especially when the option of maintenance is included. Because 50% of VAT on the supply of the vehicles can be reclaimed, it’s the most popular choice of businesses registered for VAT.


  • Potential to release more working capital back into your business.
  • Low initial outlay, from as little as one month’s rental.
  • Flexible rental period, typically between 24 and 60 months – you choose.
  • Fixed monthly payments that simplify budgeting and forward planning.
  • Vehicle(s) can be shown off balance sheet.
  • No depreciation or disposal uncertainty/concerns free up valuable time.
  • Road fund licence is included within monthly rental.
  • Proportion of rentals is allowable against tax.
  • Option to include a maintenance and roadside rescue package cost in your rental. It covers non-fuel running costs, such as servicing and parts subject to wear and tear.
  • VAT-registered businesses can reclaim 50% VAT on rental and 100% on maintenance elements.
  • With just one single invoice each month your administration costs are greatly reduced.
  • Simple ‘hand-back’ process at termination of contract;


With this VAT-efficient financing package, one monthly rental payment covers all risks, including costs of depreciation and disposal, for an agreed period of time and total mileage. Typically this will be a contract of 24 to 48 months, based on between 10,000 and 40,000 miles per annum. More than half of all new company vehicles registered each year are funded this way.

Road fund licence is included for the contractual period. Maintenance and roadside rescue packages can be added to the contract and included in the monthly payments. They offer comprehensive cover including routine servicing, replacement brake pads, tyres (unless sustained from theft, malicious or 3rdparty damage), batteries, exhausts and all other parts subject to fair wear and tear. All scheduled maintenance is carried out by the main dealer network at the retailer of your choice.

Because the car is owned by the leasing company, a Business Contract Hire vehicle does not have to be shown as an asset on your balance sheet. Some or all of the rental charge can be offset against taxable profits, and you can reclaim 50% VAT on the vehicle rental and 100% VAT on the maintenance elements.

Once the contract is up, the vehicle is simply collected free of charge by the leasing company, leaving them to worry about depreciation values and disposal of the car or van.


  • If you cancel the contract and return the vehicle, regardless of the reason, there will be a cost which the leasing company will determine.
  • There is a penalty for exceeding the agreed mileage. However, it’s fair and reasonable and payable at the end of the contract.
  • Any damage to the vehicle, beyond ‘fair wear and tear’, should be repaired before returning it or the repair cost will be added to your bill at the end of the contract.
  • To protect the business and your drivers, you must have comprehensive insurance cover on every vehicle at all times throughout the contract.


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