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Lease car conundrum


I was asked an interesting question earlier regarding lease cars and was wondering what people's thoughts were.

If a one director limited company currently leases a car under a personal agreement and claims AMAPs to cover the expenses of motoring. Is there any reason why they can not change the treatment of the expense part way through the year and elect to not claim AMAPs but actual cost. The only barrier i was thinking in the way was that the lease was in the individuals name and not the companies, if this could be changed then this would be ok?



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While the car continues to be leased personally, S.359 ITEPA 2003 prevents relief for the costs of running a vehicle other than by a claim for mileage allowance relief or the exemption of AMAPs.

If you are successful in switching the lease to the company's name, then unless the car isn't available for private use, a car benefit will arise, in which case all costs (other than fuel) should go through the company.

My suspicion would be that your client's already using the most beneficial arrangement, but you can only determine that for sure using your client's actual numbers.

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