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| General |
| Contract Hire is best viewed as long term rental of the vehicle. It is growing in popularity as most companies now recognise that it is the use of a vehicle which generates the income or keeps an employee happy and not its ownership. With a maintained Contract, fixed costs and budgetability are features of this product, you know exactly what your costs will be even
if the car is operated away from base. You benefit by having, fully qualified maintenance controllers working for you, and, from the bulk purchasing power and ability of the Contract Hire Company to reclaim V.A.T. on the purchase price of the vehicle. |
| Registration |
| The vehicle is registered in the Contract Hire Companies name. You can therefore enjoy the benefit of 20,000 units per year purchasing power even if you only operate one vehicle. |
| Ownership |
| The vehicle remains the property of the Contract Hire Company throughout the agreement, unless insurance is included. |
| Insurance |
| You are responsible for Fully Comprehensive Insurance throughout the agreement. |
| Road Fund Licence |
| Road Fund Licence is provided for the Contract period, a new tax disc will be forwarded to you in a few days before the old one expires. Should rates of duty change during the currency of the agreement you will be invoiced for any subsequent increase as it falls due. |
| V.A.T. |
| All Contract Hire rentals attract V.A.T. If you are acquiring a car wholly for use in your business, V.A.T. registered businesses are able to reclaim all the V.A.T. on the rental. If there is any element of private use only 50% of the V.A.T. is recoverable. All the V.A.T. is recoverable on maintenance if included. |
| Balance Sheet |
| Rentals paid in the financial year are simply shown in your Profit and Loss Account. Contract Hired vehicles do not show in your balance sheet. |
| Taxation |
| For cars costing under £12,000 and all commercial vehicles, you are able to offset all the rentals paid in any one financial year against tax. For Partnerships and Sole Traders a percentage may be disallowed to cover Private use. For cars costing over £12,000, 50% of the rental attributable to the capital cost in excess of £12,000 is disallowed – Confused – ask
WWCB2B.COM. |
| Maintenance |
| If a with Maintenance Contract is selected, all routine maintenance and repairs will be paid for, including tyres, batteries, exhausts etc. subject to normal wear and tear. You are liable to recharges in event of accidental damage / abuse or neglect i.e. punctures. |
| Early Termination |
| You are able to terminate the agreement at any stage. Although your total liability extends to the total of the outstanding rentals plus damage and pro rata mileage excesses, it is usual however for a rebate to be given. As vehicles do not depreciate evenly, and your initial outlay is minimal, it is possible that a negative equity situation will arise. This can be
quite substantial in the early part of the agreement, GAP Insurance, which we recommend, can cover this negative equity in the event of the vehicle being a total loss. |
| Disposal |
| Most people are good at buying vehicles, few relish or are good at disposing of them. At the end of the contract you simply return the vehicle. Subject to the vehicle being free from accidental damage and within the agreed mileage parameters there will be no more to pay. |
