I assume by “lease” you mean you are in essence renting it? In which case, if the car has emissions under 160g/km, you get tax relief on all of the payments. If the car’s emissions are above 160g/km, then 15% is blocked for tax purposes.
However, please note, under current plans the emissions level will drop from 160g/km to 130g/km on 1st April 2013 for companies or 6th April 2013 for unincorporated businesses. So if you are looking at leasing a vehicle with emissions between 130-160g/km, it might be advisable to take the contract out before April 2013.
Also, please review the invoices carefully, as half of the VAT is often blocked on lease payments- on the assumption that they often have a mixture of business and personal use.
If you would like to discuss your plans before you sign anything, your local TaxAssist Accountant would be happy to help.
By Jo Nockels | Google+ Profile
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