You may have heard the phrases business contract hire and personal contract hire, or noticed the two different products displayed on our website. But what is the difference between them and why are the prices different?
Well to answer that, we will start with the differences in the price. The truth is that they are actually both the same price, however they are displayed differently.
Business contract hire is advertised without the VAT and must be added on to the payment and personal contract hire includes the VAT in the payment.
The reason business contract hire does not include the VAT, is because, if you are a VAT registered business, you can claim back a proportion of the VAT, depending on the vehicle type you are leasing.
If you have taken out a commercial vehicle on lease (a van or truck for example), you can claim back 100% of the VAT, assuming you are a VAT registered business. If you have a car on lease through your business, you can claim back 100% of the VAT if the vehicles is used solely for business use with no personal use at all. In the event that you do use the car for some personal use, you would be able to claim 50% of the VAT.
I hope this helps you understand the differences between the two. If we can do anything to help with your vehicle enquiries or you would like to learn more, please get in touch. We would love to hear from you
23rd of January 2020
Red Kite Leasing are a credit broker and not a lender, we are authorised and regulated by the Financial Conduct Authority. Registered No : 820084
Registered in England & Wales with company number : 11524129 | Data Protection No : ZA481018 | VAT No : 329 9485 49
Registered Office : 73 Newland, Witney, Oxfordshire, OX28 3JW
Disclaimer: All vehicle images and descriptions are for illustration and reference purposes only, all vehicle leases are subject to credit approval and subject to change at any time. E&OE.
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