If you are thinking about a business lease on a new vehicle, you do need to consider the BiK (Benefit in Kind) which is payable on a vehicle. Leasing a luxury car through your business is one way to procure a vehicle. However, as you are an employee enjoying a benefit on that vehicle, you do have to pay tax based on the P11d and CO2 value of the vehicle.
From the company’s perspective, it can reclaim 100% of rentals on the vehicle for a vehicle which is 130g/km or less. In April 2018, this will change to 110g/km or less. Higher CO2 vehicles mean that the company can only reclaim 85% of the rentals against tax. However, the tax benefit for the company is irrelevant to the individual driver.
What the driver must ask the supplier (or credit broker), is for the P11d value. The P11d value allows the accountant or the HR officer to complete a form, which is actually called the P11d form, to calculate the expenses and benefits a employee/director has within the business. For more information on P11d forms check out this resource.
The P11d should include the list price (plus Vat) plus any additional options or extras (manufacturer or dealer fit) and any delivery charges. The first registration fee and annual road fund licence (RFL) are not included within this figure.
Before proceeding with any business contract hire deal, do ensure you have an accurate P11d value. You really do have to consider that even if the monthly rental on the vehicle is affordable to the company, the P11d may not be overly-respectful to your BiK requirements. Company car drivers do therefore need to ensure any options which are added onto the car are definitely required if they are operating to a budget.
For more information on P11d values and how they may apply to your new lease car, simply get in touch with the help team here at CarLease UK. You can also read more about business car leasing in our help and advice section or check out some of the latest reviews and news for business leasing in our blog and news pages.
CarLease (UK) Ltd t/a CarLease UK, Car-E-Lease UK and VanLease UK is Authorised and Regulated by the Financial
Conduct Authority – our Firm Reference Number (FRN) is 706617.
Carlease (UK) Ltd t/a CarLease UK, VanLease UK and School Minibus Leasing UK will introduce you to a limited number of finance providers which have been carefully selected by us - please note that we do not provide independent financial advice. The finance providers that we use may make payment to us if you elect to enter into an agreement with them. The amount we receive will affect what you pay for your vehicle. The commission received may or may not be capped in accordance with that finance company’s policy. We may also receive an extra amount based on how much business we provide to that finance company, the types of products you take from the finance company and the quality of our service. For Regulated Customers you can ask us about the payments we receive from the finance company so long as this is in good time before the agreement is made. Failure to maintain rentals may result in the vehicle being withdrawn (this may affect your credit).
All images on this website are for illustrative purposes only and may not reflect the actual vehicle which is delivered to you. All prices shown are subject to change at any time and are subject to credit status and vehicle availability.
FRN 706617 | BVRLA Membership No. 1471 | Data Protection Reg. ZA088399 | VAT No. 200422089 | Registered in England 09312506
Our Registered Office - Kings Business Centre, Warrington Road, Leigh, Greater Manchester, WN7 3XG
Copyright 2021 © CarLease (UK) Ltd. All Rights Reserved
CarLease (UK) Ltd work alongside the select finance companies:
CarLease (UK) Ltd have a partnership and affiliation with: