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In the UK the majority of lease vans are leased by small businesses that are self-employed, sole-traders, and those in partnerships. If you’re one of these types of business and looking to lease your next car or van, then our comprehensive, easy-to-read guide explains everything you need to know.
If you’re looking for a car or van for purely personal use, then a personal vehicle lease contract will suit you best. However, if you’re looking to use the vehicle (whether in part or whole) for business purposes, then it’ll be worth considering both types of contract options - a business lease and a personal lease contract – to see which will best suit you and your business.
Business car and van leasing offers businesses a whole host of excellent benefits.
Business vehicle leasing is when a car or van is leased in the name of one of the following entities and used for business purposes (but can also potentially be used for personal purposes as well):
As part of the application process for business vehicle leasing, the self-employed/sole trader/partnership will need to provide some or all the following documents as proof of eligibility:
Business vehicle lease applications for the self-employed/sole trader/partnership also undergo a personal credit check (in the case of partnerships, all partners will need to provide their personal details), to help assess credit strength and risk status. This a relatively quick and easy process, however.
In some circumstances we may also require one or more of the following:
If your credit check proves successful, you’ll be in the great position of being able to choose between a business vehicle lease and a personal one. If this is the case, then it makes sense to consult your accountant or financial advisor about how the two options could differently affect both your business and personal tax situation.
For someone who is self-employed, a sole trader or in a partnership, the key business facts worth considering about business van leasing are:
Personal car or van leasing is when a lease contract is taken out in the name of an individual (not in the name of a business or company), in this instance the vehicle may be used for any purpose (i.e. for business and/or personal use).
Personal car/van leasing can be a useful way for either a new business with inadequate business documents, or a business ineligible for a business vehicle lease contract to be able to lease a brand-new car or van at an excellent rate, and at the same time enjoy some really great business benefits.
With personal vehicle leasing, even if you intend to use your car or van in part for business purposes, your application will be considered as a non-business (i.e. personal) application.
To be eligible you will simply need to meet the following criteria:
In addition, all applicants undergo a personal credit check to assess both their credit strength and risk status. This is usually a fairly straightforward, quick process, however.
The reason for the credit check is that finance companies make their decision on whether to provide finance to a customer based on their past and present financial circumstances. Naturally, it will be much easier for you to lease a vehicle if you have a healthy credit status, however, if you do have a history of poor credit, then you may still be able to lease through us using a funder who specialises in those with adverse credit history and/or those who have recently moved to the UK for work.
Whilst a personal car or van lease contract would be taken out under your personal name (not under your business), there are a number of things that as a business owner (i.e. self-employed, a sole trader or in a partnership,) it’s worth considering:
A personal car or van lease contract may be more suitable (than a business vehicle lease contract) if one or more of the following apply to your circumstances:
Information is provided as a guide only. Select Car Leasing cannot be held responsible for any personal or business decisions made as a result of information provided in the guides. As with all aspects of taxation, it is the responsibility of individuals and businesses to understand the rules and regulations and act accordingly. As personal and business circumstances can vary, it is also advised that you take professional accounting advice before making a final decision.
If you'd like to speak with our friendly team about business vehicle leasing, simply call 0118 920 5130 or email us at: enquiries@selectcarleasing.co.uk
If you're thinking about business car leasing, we have a collection of informative guides on all aspects of business leasing to make the process as simple as possible.
More and more businesses now choose to lease rather than buy their cars, vans and fleet vehicles, and this number continues to grow year on year. Today, corporate leasing alone (not including business types such as SMEs, the self-employed and sole traders) accounts for over 2 million vehicles in the UK.
Regardless of the shape or size of your business, business car leasing offers a myriad of benefits, making it a really smart choice. To find out more about the tax and accounting benefits of business car leasing, along with the staff-related benefits and broader business-related benefits, read on.
If you’re unsure whether it’d be better for your business to lease its next new car or instead to buy it, then read on because our business vehicle leasing vs. buying guide explains everything you need to know and consider before you make this important decision.
