Business Leasing vs Subscription
Benefits of electric car business leases and subscriptions
When it comes to offering your employees a company car, there are three options: owned, leased or a subscription. By owning the company cars you provide to your employees, the car is treated as a fixed asset, however, this does mean some tricky tax implications. As a result, many businesses prefer to choose either electric car leasing or newer subscription models, which offers the same benefits with none of the admin or accounting complexities.
The benefits to your company of offering electric cars include:
- Add to your existing benefits package
- Offer an attractive perk to retain and attract top industry talent
- Improve your business’s environmental impact
Offering a company car is an attractive perk, but not one that can be offered to all employees. However, a salary sacrifice scheme is an affordable way for all permanent employees to drive their own EVs, with huge savings for them and tax benefits to your business.
This is all on top of the plethora of benefits that come with driving an electric car, including lower running costs, a smaller environmental impact and no congestion charges (including in ULEZ). Check out more benefits of electric cars to see exactly how driving electric can benefit your business, your employees and the environment.
What’s best for your business: leasing vs subscription vs purchase
As we’ve already highlighted, owning your company cars means they’re treated as fixed assets. With that comes depreciation, which can be difficult and complex when it comes to tax implications. Both leasing and subscribing to an electric car come with positives over owning, including:
- No depreciation of assets
- A lower or zero deposit
- All-inclusive features such as insurance, servicing and breakdown cover
However, while an electric car business lease can be more suitable than owning one, there are other drawbacks that can make it restrictive, including multi-year contracts and less flexibility. With an electric car subscription:
- There are no multi-year contracts
- Drivers can change their vehicle whenever they like
- Just give 30 days’ notice after the first month when you want to return the car
With an elmo electric car subscription, everything is managed online, so you can offer your employees a fantastic benefit with little admin.