Business Contract Hire

A simple, tax-efficient way to lease vehicles without ownership risks.
Contract Hire gives your business new vehicles, fixed costs, and fewer admin headaches.

What is Business Contract Hire?

Flexible leasing for businesses – with predictable costs, minimal hassle, and no ownership risk.

Business Contract Hire (also known as Operating Lease) is a long-term rental agreement, typically between 12 and 60 months, tailored to your business needs.


Why Choose Business Contract Hire?

Business Contract Hire offers a cost-effective and low-risk way to run any number of vehicles, without tying up your capital.

Key Advantages:

  • Minimal capital outlay

  • Fixed monthly payments – ideal for budgeting

  • Improved cash flow

  • Fixed interest rates for the duration

  • Reduced in-house administration

  • Road fund licence (vehicle excise duty) included for the contract term

  • Optional maintenance package

  • Optional breakdown rescue cover

  • Optional replacement vehicle in case of breakdown

  • Optional GAP insurance – covers the shortfall if your vehicle is written off

You also benefit from ongoing advice and support throughout your agreement.


Considerations to Be Aware Of

As with any finance product, it’s important to understand the terms:

Potential Disadvantages:

  • Early termination fees may apply

  • Excess mileage charges if you exceed the agreed allowance

  • You must maintain the vehicle to return standards – damage beyond 'Fair Wear and Tear' may result in charges

  • Fully comprehensive insurance is required throughout

  • There is no option to purchase the vehicle – you hand it back at the end


VAT and Accounting Benefits

Contract Hire is a popular choice for VAT-registered businesses due to tax efficiencies:

  • The leasing company reclaims VAT on the purchase, helping reduce your monthly rentals (rentals are plus VAT)

  • You can usually reclaim:

    • 50% of the VAT on cars used for business

    • 100% of the VAT on commercial vehicles (if no private use)

    • 100% of VAT on maintenance charges

  • Contract Hire typically qualifies as off-balance-sheet funding, which may improve your gearing ratio and enhance future borrowing capacity (subject to current accounting rules)

One of the biggest advantages? You don't carry the risk of depreciation or disposal – the leasing company underwrites the vehicle's future value.

Want to know more about Contract Hire for your company? Call us on 0161 425 8334 for tailored advice.