Contract for hire
Article Abstract:
Contract hire leases are increasingly becoming popular as a way of building a company car fleet in the UK and are a viable alternative to outright purchases and finance leases. Contract hire currently accounts for about 30% of company cars in the UK. Under a contract lease, the lessor, the company that owns the vehicles, supplies the vehicles for a level of rent that does not fully amortize the cost of the vehicle: the company makes up the difference from the residual value of the vehicle after expiration of the lease. The lessee benefits for the terms are lower than an outright purchase, there is no need for the vehicle to be capitalized on the lessee's balance sheet, and the fees are treated as operating expenses charged to the profit and loss account. Contract leases improve efficiency at the company level by removing the burdens of administration, simplifying cash flow and budgeting as there is only one fixed monthly payment, and removing risk of exposure to residual value and interest rate fluctuations.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1990
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Which financing option?
Article Abstract:
Decisions on how to finance company cars in the UK have been made complex due to changes to the tax code effected by the Inland Revenue: employee taxation on company cars has increased 200% in the last three years. The three methods of financing a company car are outright purchase, contract hire, and finance leases. The most important considerations when making a financing decision are the cost of the car, reliability, and type of car. Depreciation of the fleet is a prime consideration since it is the major cost to the company. Companies must be careful about their choice of vehicle in order to maintain reasonable limits on depreciation. The increase in taxation has reduced the attractiveness of company cars as a benefit to employees, but it is often considered a standard part of an employment package. Some firms are getting around this by substituting salary increases for a car, loaning cars, or offering other incentives in place of a company car in order to attract and retain employees.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1990
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Financing the final frontier
Article Abstract:
Private investment in space exploration and technology is increasing as public funds diminish. An overview of investment in the space industry is given.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 2001
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