Range Rover owners may be excited about the latest tax benefits that will be provided to them just for being a luxury car enthusiast (or simply leasing it). The brand is considered one of the most popular kinds of luxury vehicles in the United Kingdom and around the world. Even many Range Rover owners have talked about their disdain regarding certain financial implications that were applicable.
However, those who lease a Range Rover will see tax benefits that will be advantageous to them in the future. They also include monthly payments that qualify as a deductible expense – especially for those who are business owners or self-employed individuals in the United Kingdom so long as the Range Rover is used for business purposes.
Business leases can also see deductions on the lease itself but with a catch. The vehicle must emit 110g/km or carbon dioxide (CO2) or less. This can lead to a 100 per cent deduction of the lease payments themselves. For higher-emission vehicles, persons who lease such vehicles can still enjoy deductions, except they will be at 85 per cent instead of 100.
Personal leases may have deductions, but they may not be the same as those that business owners will enjoy. Nevertheless, individuals who are seeking Range Rover lease deals can inquire about tax benefits through their local dealer. Such deductions can be a cost-effective option especially when it comes to depreciation and repair costs. The tax benefits don’t end here, though.
Businesses that are VAT-registered will be able to reclaim half of the VAT that they pay on lease payments – regardless if the vehicle is used for personal or professional purposes. If the vehicle is exclusively for businesses, Range Rover leaseholders can be subject to reclamation of 100 per cent of the VAT. The Benefit-in-Kind (BIK) tax may also be taken into consideration for business owners who use Range Rovers in their fleet. Luxury vehicles will draw in higher BIK rates because of their value and emissions. If the vehicles are electric, the tax liability can be reduced – which also includes the use of the PHEVs in the Range Rover line.
Businesses owners should note that only they can be able to claim capital allowances on their vehicles. According to the Government, employees cannot claim such allowances for vehicles that they use for work purposes – but can claim for the miles they log in for business purposes along with petrol costs. Aside from Range Rovers and luxury vehicles, such capital allowances will be qualified for vehicles that are used privately (including motorhomes) and vehicles that are not designed for the transportation of goods.
Lorries, vans, or trucks are excluded from annual investment allowances, the Government adds. The same applies to vehicles that had been purchased after 6 April 2009. The allowances will also be dependent on the date when the vehicles were bought or leased. For example, vehicles that are bought or leased from April 2021 onward can claim allowances where applicable (Maine rate allowances, first-year allowances, etc.). For new and unused vehicles with CO2 emissions that are 0g/km or electric, the claim is 100 per cent of the allowances for the first year.
Similar allowances apply for vehicles bought or leased earlier than April 2021. However, many businesses have recommended that in order to maximise their tax benefits for Range Rover leasing, the vehicles themselves are newer as opposed to older models. Range Rover Dealerships across the United Kingdom state that such vehicles that are greater than 6000 pounds (or approximately 2720 kg) can see a depreciation of 100 per cent of the tax if used for businesses at all times throughout a full calendar year. Dealerships also advise that business owners should consult with their tax advisor should they have any questions or concerns regarding tax benefits.
Nevertheless, Range Rover leaseholders can see such benefits compared to other luxury cars. There are different models that business owners and luxury car enthusiasts can lease in order to qualify for 100 per cent depreciation so long as they are used under such specific circumstances. Luxury car enthusiasts and business owners, can visit their local Range Rover dealer for information on how they can lease one of their models to qualify for UK tax benefits that may apply to them. Again, it is advisable to consult with a tax advisor to see which benefits you actually qualify for – be it as an individual or a business.
