3. National Insurance
Savings can be made on National Insurance contributions if you use car leasing for the company cars in your small fleet.
Employers must pay Class 1A National Insurance contributions on the benefit in kind value of an employee’s company car. The lower the CO2 emissions of the company car you lease, in general the lower the NI payments you will have to make for your employees.
So could a car lease work for you?
If you can lease a car below 130g/km – preferably below or around 100g/km – then there are real tax savings to be made by your firm.
Kiri Nowak from small fleet leasing firm leaseyournextcar.com says that car leasing can benefit any small business or SME small fleet and explains:
“Car leasing is an excellent option for self-employed professionals and businesses as there are numerous tax benefits. Monthly leasing payments can be offset against tax if certain requirements are met.”
In addition, if you get a good deal on the business car lease, the case for car leasing becomes even stronger: a good deal + tax benefits!