I would like to do this, but I'm not sure if it's possible. Anyone have any experience with this?

My husband is paying for his new Mini Cooper S this way. BMW do something called 'Mini Lease'. You pay a fixed amount every month for XX months, but the difference is that because it's through your business (VAT registered), BMW reclaim the VAT themselves, therefore it doesn't get passed onto you. At the end of the term you own the car in full, so you can either keep it, sell it privately or part-ex to a new car.

We are both self employed, VAT registered, running small companies and requiring the car for a small amount of business miles and a large amount of pleasure

I would be quite happy for the car to be an asset of the company (rather than mine), since I'm self-employed it doesn't really make any difference. It would be cool to save the VAT though.

I've checked at the Nissan web site, but it's pretty confusing...

 

This is where I get completely lost... I think the best bet is to have a little chat with your Nissan Dealership in the morning.

Even if your salesperson doesn't know the answer, they should know someone who does...

good luck to you

rich

 

As far as I was aware, VAT can only be reclaimed when buying vans, lorries, etc, or when leasing a vehicle. Maybe there is a new rule that I've missed. Let us know what you find out

 

Have a look at this:

http://www.mini.co.uk/UK/en/finance_...mini_lease.jsp

The VAT is reclaimed by the dealer, not by the business. Surely Nissan will offer something similar?

 

You've probably seen this already, but this is similar to the mini one you noted...

http://www.nissan.co.uk/fleet/hirepurchase.html

Hire Purchase

Many people are familiar with the convenience of hire purchase, and with Nissan Finance it can just as easily be used to spread the cost of driving away a car.

After paying a deposit, you pay for the vehicle over a fixed period, usually 3 years, during which time the balance and interest are repaid in equal rentals. At the end of the fixed period, you are then given the option to buy the vehicle outright by paying a nominal 'option to purchase' fee. The car is then yours to keep, sell or use as part exchange on a newer model at your Nissan dealer.

We recommend that you think about how much you can comfortably afford to pay every month, which finance term you'd prefer (minimum term 12 months, maximum term 48 months) and the size and method of your deposit (minimum deposit 10% of cash price / minimum advance amount £2,000) - cash, part exchange or a combination of both.

Benefits of Nissan Finance Hire Purchase

Flexible deposit terms
Fixed monthly rentals for ease of budgeting
Various repayment terms
Option to own the vehicle at the end of the agreement
Leaves other Bank and Building Society credit lines undisturbed

Extra Benefits Available for Business Customers

Rentals do not attract VAT
Working capital remains in the business
Interest may be treated as an expense and therefore reduces tax liability
Writing down allowances may be claimed and off set against tax liability
Variable Rate and Balanced Payment schemes available on Hire Purchase

If Hire Purchase is of interest to you and if you would like to discuss your requirements in more detail, please contact Nissan Finance on 0870 60 60 666.

 

"Rentals do not attract VAT" ?

Is this really the same as saying "we reclaim the VAT so your monthly payments are VAT free?"

I mean, this would essentially take £5k off the purchase price of my car....

 

Ok, I've left 2 messages with my dealer to have their finance guy call me back, and no reply... I guess I'm no so important now they've got my £2k.

 

From the MINI website.
This option is just for businesses, and gives you great tax advantages - especially if you're VAT registered. As with MINI Drive, we reclaim the VAT ourselves, and lower your rental payments accordingly. A portion of these payments is also allowable against tax. At the end of your agreement, you can sell your MINI to an unconnected third party, and keep the proceeds.

Sounds too good to be true.....

But if you read between the lines, you are still 'leasing' the vehicle. You can reclaim the VAT on your lease payments . But when you sell the car to an 'unconnected third party' (if it was a 'Full Payout Lease') VAT would be payable on the proceeds. If you had a 'Ballon Lease', the car would simply be returned to the dealer (or whatever).

I imagine that if you do the figures, you would probalby save a few £'s, due to the tax relief during the lease period, but nearer £500 than £5k.

I could be wrong though, keep me informed....

 

Honestly, I really think it is as simple as they don't charge you VAT if you buy through a business. My husband is buying (not leasing!) his car this way.

It's a lease in as much as any hire purchase is - until you've made all of the payments the car is not your's. But you don't have to give the car back like with a lease, you are actually buying it and you get to keep it at the end. I don't think they'd let you sell the car and keep the proceeds if it was a leased car...

Also, you don't actually have to reclaim the VAT on anything, because Mini don't actually charge you the VAT (they reclaim it directly themselves). You simply pay the pre-VAT amount.

When my husband's done with his 3 years of (VAT free) payments, he'll get a choice:

1. Pay the final balloon payment (about £6k) and keep the car (which he is then free to sell if he likes, with no VAT to pay to anyone, just like any other 2nd hand car sale)
2. Return the car to the dealer with no more payments

Option 2 would only really make sense if the depreciation was so severe that you could get an identical 3 year old car for less than the final payment amount.

But regardless.... none of this matters unless Nissan do something similar...