Hi there,
As a non VAT registered sole trader I have signed up to a PCH deal and 90% of the car's mileage will be business. Can I offset the lease payments (or the business percentage at least) against profits or does it legally have to be a BCH deal as opposed to PCH?
Many thanks
Replies (9)
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What does your accountant say?
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The short answer to your question is yes, you can claim an appropriate portion of the hire costs. Personal or business contract makes no difference.
Personal or business contract makes no difference.
Maybe not tax but may make a difference in terms of the legal agreement under which the vehicle is leased.
I was only answering the question asked. I do not disagree that the OP should take professional advice on all of the potential implications.
Maybe not tax but may make a difference in terms of the legal agreement under which the vehicle is leased.
Agree with this.
Was PCH cheaper than BCH ? You (the OP) may have breached the terms of the lease.
Same price but they led me to believe that it would be more straightforward as I would have to give more of my accounts to them for a BCH whereas they just do a credit check for a PCH. To be honest they seemed more keen on a PCH and also suggested that VAT was the only difference which as I am not registered wouldn't make a difference.
Who are "they" ?
The leasing company with whom you contracted ?
Or some pushy salesman, keen to close the deal ?
Ach, from a legal viewpoint, these things are usually OK provided you keep paying.
Did he explain the VAT difference ? There should be none, of course.