Chauffeurs new car: Lease, PCP or purchase?
Discussion
As above really, im a (sole trader) chauffeur licenced in London. I'm about to replace my vehicle with a new Mercedes V class and I'm not sure what's the best way to 'own' it.
It's likely to be around £45000 incl VAT and i'll have about £10000 deposit (if required)
Even though it's used exclusively for work I'm not sure whether it's possible to reclaim the whole amount against tax as it's not a Hackney carriage.
I'm struggling to work out what is the most cost effective way to do it, and wondered if anyone cleverer than wot I am had any pearls of wisdom!
It's likely to be around £45000 incl VAT and i'll have about £10000 deposit (if required)
Even though it's used exclusively for work I'm not sure whether it's possible to reclaim the whole amount against tax as it's not a Hackney carriage.
I'm struggling to work out what is the most cost effective way to do it, and wondered if anyone cleverer than wot I am had any pearls of wisdom!
I'm a private hire driver (sole trader) and my accountant claimed the entire purchase price of mine back. Not sure how that would work with any kind of finance though. It's an asset of your business and therefore tax exempt.
When you come to sell it though you will pay tax on that amount. I think that's how it works anyway.
When you come to sell it though you will pay tax on that amount. I think that's how it works anyway.
I am an accountant but not one who specialises in this sort of purchase or in advising businesses generally - you need advice from someone who is 
.
In principle though if 100% business use you can get the full cost set off against your profits when calculating income tax - but I am not sure if you will be able to get a year one immediate 100% write down or will have to claim writing down allowance over the period of use - might depend on whether or not it is going to be classified as a commercial vehicle, passenger vehicle or car
For VAT, if you are VAT-registered and it has 100% business use you should be able to reclaim the VAT in full when you buy it (even if a car - and definitely OK if a commercial vehicle
.In principle though if 100% business use you can get the full cost set off against your profits when calculating income tax - but I am not sure if you will be able to get a year one immediate 100% write down or will have to claim writing down allowance over the period of use - might depend on whether or not it is going to be classified as a commercial vehicle, passenger vehicle or car
For VAT, if you are VAT-registered and it has 100% business use you should be able to reclaim the VAT in full when you buy it (even if a car - and definitely OK if a commercial vehicle
As mentioned above - you'll struggle with a lease (contract hire) as the main leasing companies will not consider cars being used for hire & reward.
However, hire purchase and potentially lease purchase options are available through some of the UK lenders (I can help with this as well, we finance a fair bit for chauffeurs).
However, hire purchase and potentially lease purchase options are available through some of the UK lenders (I can help with this as well, we finance a fair bit for chauffeurs).
Ok thanks all, (although I'm still not really any clearer!) There are so many different types of lease that I don't know what works best..
Incidentally I hear what you're saying about using a leased car for private hire however the current one is leased direct from Merc and it's no problem. I think they realise that 90% of these vehicle are used for that purpose.
Incidentally I hear what you're saying about using a leased car for private hire however the current one is leased direct from Merc and it's no problem. I think they realise that 90% of these vehicle are used for that purpose.
In 10 years I've never heard of Mercedes finance stipulating no private hire/hackney work with regard to their deals. I mean really?
What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
OP. What you need to look at is the mileage restrictions on some PCP/lease deals. I've never seen one, even from an independant, that is for more than 40k pa. If you're a sole trader you'll do that in 6 to 8 months.
Put down as much deposit as you can afford and get the rest of HP where you'll own it at the end and it'll have no restrictions.
Alternatively you could do what the majority of chauffeurs do and clock the f
k out io the car (sorry, mileage correction) then hand it back after the loan period!
Personally unless you have your own contracts there's no money to be earn't in chauffeuring. This is why most chauffeurs drive 10yo cars and wear Tesco suits!
What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
OP. What you need to look at is the mileage restrictions on some PCP/lease deals. I've never seen one, even from an independant, that is for more than 40k pa. If you're a sole trader you'll do that in 6 to 8 months.
Put down as much deposit as you can afford and get the rest of HP where you'll own it at the end and it'll have no restrictions.
Alternatively you could do what the majority of chauffeurs do and clock the f
k out io the car (sorry, mileage correction) then hand it back after the loan period!Personally unless you have your own contracts there's no money to be earn't in chauffeuring. This is why most chauffeurs drive 10yo cars and wear Tesco suits!
iambeowulf said:
In 10 years I've never heard of Mercedes finance stipulating no private hire/hackney work with regard to their deals. I mean really?
What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
OP. What you need to look at is the mileage restrictions on some PCP/lease deals. I've never seen one, even from an independant, that is for more than 40k pa. If you're a sole trader you'll do that in 6 to 8 months.
Put down as much deposit as you can afford and get the rest of HP where you'll own it at the end and it'll have no restrictions.
Alternatively you could do what the majority of chauffeurs do and clock the fk out io the car (sorry, mileage correction) then hand it back after the loan period!
Personally unless you have your own contracts there's no money to be earn't in chauffeuring. This is why most chauffeurs drive 10yo cars and wear Tesco suits!
Answered your own question there haven't you?What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
OP. What you need to look at is the mileage restrictions on some PCP/lease deals. I've never seen one, even from an independant, that is for more than 40k pa. If you're a sole trader you'll do that in 6 to 8 months.
Put down as much deposit as you can afford and get the rest of HP where you'll own it at the end and it'll have no restrictions.
Alternatively you could do what the majority of chauffeurs do and clock the f
k out io the car (sorry, mileage correction) then hand it back after the loan period!Personally unless you have your own contracts there's no money to be earn't in chauffeuring. This is why most chauffeurs drive 10yo cars and wear Tesco suits!
On one hand you say you've never seen a taxi restriction on a finance deal, and on the other admit the mileage restriction will make running the car as a hire vehicle impossible.
Regardless of the specific wording, it amounts to the same thing.
iambeowulf said:
In 10 years I've never heard of Mercedes finance stipulating no private hire/hackney work with regard to their deals. I mean really?
What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
Well it depends on the finance agreement that's being considered. MBFS will probably look at private hire firms for hire purchase where there's no mileage restriction on the agreements and where the customer benefits from final ownership. But they don't offer contract hire for chauffeur companies (and neither do Lex, Arval and ALD Automotive for that matter.) I don't know the specific reasoning for this but it's to do with sub-letting of the vehicle. It's not something that they would advertise, but would be a consideration at the point of proposal. It's not tripe.What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
Centurion07 said:
iambeowulf said:
In 10 years I've never heard of Mercedes finance stipulating no private hire/hackney work with regard to their deals. I mean really?
What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
OP. What you need to look at is the mileage restrictions on some PCP/lease deals. I've never seen one, even from an independant, that is for more than 40k pa. If you're a sole trader you'll do that in 6 to 8 months.
Put down as much deposit as you can afford and get the rest of HP where you'll own it at the end and it'll have no restrictions.
Alternatively you could do what the majority of chauffeurs do and clock the fk out io the car (sorry, mileage correction) then hand it back after the loan period!
Personally unless you have your own contracts there's no money to be earn't in chauffeuring. This is why most chauffeurs drive 10yo cars and wear Tesco suits!
Answered your own question there haven't you?What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
OP. What you need to look at is the mileage restrictions on some PCP/lease deals. I've never seen one, even from an independant, that is for more than 40k pa. If you're a sole trader you'll do that in 6 to 8 months.
Put down as much deposit as you can afford and get the rest of HP where you'll own it at the end and it'll have no restrictions.
Alternatively you could do what the majority of chauffeurs do and clock the f
k out io the car (sorry, mileage correction) then hand it back after the loan period!Personally unless you have your own contracts there's no money to be earn't in chauffeuring. This is why most chauffeurs drive 10yo cars and wear Tesco suits!
On one hand you say you've never seen a taxi restriction on a finance deal, and on the other admit the mileage restriction will make running the car as a hire vehicle impossible.
Regardless of the specific wording, it amounts to the same thing.
I was responding to an earlier comment about "most HP and PCP agreements have a clause in them stating the vehicle can't be used as a taxi etc.", which is simply not true and is not the same as mileage limitations or any number of small print limitations.
I trust you neither have a business or have ever bought a vehicle for business use.
I suggest you shut up and let the grown ups answer the questions on Pistonheads, or pop over mx5iswellwicked.com where people of you your own mental capacity with welcome you with dribbles and high-fives.
iambeowulf said:
Centurion07 said:
iambeowulf said:
In 10 years I've never heard of Mercedes finance stipulating no private hire/hackney work with regard to their deals. I mean really?
What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
OP. What you need to look at is the mileage restrictions on some PCP/lease deals. I've never seen one, even from an independant, that is for more than 40k pa. If you're a sole trader you'll do that in 6 to 8 months.
Put down as much deposit as you can afford and get the rest of HP where you'll own it at the end and it'll have no restrictions.
Alternatively you could do what the majority of chauffeurs do and clock the fk out io the car (sorry, mileage correction) then hand it back after the loan period!
Personally unless you have your own contracts there's no money to be earn't in chauffeuring. This is why most chauffeurs drive 10yo cars and wear Tesco suits!
Answered your own question there haven't you?What difference would it make to them?
If that was the case then Addison Lee would be screwed!
Honestly. There's utter tripe posted on this site sometimes!
OP. What you need to look at is the mileage restrictions on some PCP/lease deals. I've never seen one, even from an independant, that is for more than 40k pa. If you're a sole trader you'll do that in 6 to 8 months.
Put down as much deposit as you can afford and get the rest of HP where you'll own it at the end and it'll have no restrictions.
Alternatively you could do what the majority of chauffeurs do and clock the f
k out io the car (sorry, mileage correction) then hand it back after the loan period!Personally unless you have your own contracts there's no money to be earn't in chauffeuring. This is why most chauffeurs drive 10yo cars and wear Tesco suits!
On one hand you say you've never seen a taxi restriction on a finance deal, and on the other admit the mileage restriction will make running the car as a hire vehicle impossible.
Regardless of the specific wording, it amounts to the same thing.
I was responding to an earlier comment about "most HP and PCP agreements have a clause in them stating the vehicle can't be used as a taxi etc.", which is simply not true and is not the same as mileage limitations or any number of small print limitations.
I trust you neither have a business or have ever bought a vehicle for business use.
I suggest you shut up and let the grown ups answer the questions on Pistonheads, or pop over mx5iswellwicked.com where people of you your own mental capacity with welcome you with dribbles and high-fives.
I'm fairly sure the grown-ups on here understood that was the point I was making.
Oh, and by the way....
iambeowulf said:
I suggest you shut up and let the grown ups answer the questions on Pistonheads, or pop over mx5iswellwicked.com where people of you your own mental capacity with welcome you with dribbles and high-fives.
Now jog on, stroppy.
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