Becoming your own boss… better work/life balance… Flexible working… Creating your own hours… There are many advantages to being self-employed, but how does it work when you want to lease a car for your own business?

Currently, there are 5 million self-employed workers in the UK. To put that into perspective, that’s 15% of all British workers! With self-employment becoming increasingly popular, it makes sense that leasing companies such as ourselves offer brand-new cars, pickups and vans to those with their own business.

We appreciate that not everybody is fully aware of vehicle leasing, particularly in terms of getting their own, one-person business on the roads. With this in mind, we have created a guide to business car leasing for the self-employed.

What type of businesses can lease cars?

Pretty much any business has the right to lease a car through the company, including sole traders. If your business falls into one of these categories, there should be little issues with you collecting a brand-new, 69-plate vehicle from our office (or having us deliver one to your office, of course!).

  • Sole Traders
  • Limited companies
  • Partnerships
  • LLPs
  • Charities
  • PLCs
  • VAT-registered business
  • Local authorities & central government

There are more types of businesses and organisations that qualify for a business car lease. If you are unsure about your own self-employed business, please don’t hesitate to get in touch with our friendly team for more info.

“I’m self-employed. What do I have to do to qualify for a business car lease?”

The process for gaining a business car lease for a sole trader or one-person business is not all too dissimilar to that of any other business.

We will complete a few routine checks, which include proof of address, ID, bank statements, and will then ask you a series of questions to ensure you get the exact make and model of vehicle to suit your requirements.

If you’re wondering, “What type of credit score do I need to lease a car?”, please feel free to refer to our credit guide. This will tell you that, while credit checks are included in our leasing process, you will not be turned down for a lease solely on your score.

Why? Because we understand that being a sole trader or start-up is difficult, and that everyone has to start somewhere. We take great pride in helping people’s small-to-mid-sized businesses thrive, and will not hinder them by refusing them a lease due to low or insufficient credit history.

How does tax work with business car leases for the self-employed?

By now, you’re probably fully aware of how much modern-day cars depreciate. This may be one of your main motivators behind opting for a lease instead of buying a vehicle out-right.

But what you may not know, is that there are also many more financial benefits to leasing a car if you’re self-employed, least of all when it comes to tax. When leasing your vehicle, be sure to remember the following:

  • VAT registered businesses can offset 100% of the VAT on a van (50% on cars) if you use it solely for business.
  • Sole traders/self-employed individuals do not have to pay company car tax.
  • You can get short-term vehicle leases for as little as 6 months. This is perfect for start-ups and sole traders who want to avoid large, costly commitments.
  • You can claim the monthly cost of your lease against profits depending on emissions. Our team can advise you on this further – simply give us a call.
  • There are many advantages of leasing vs buying.

Click here for more business benefits of leasing a vehicle.

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