A sole proprietorship and business leasing

01 juli 2021

If you have a sole proprietorship, you probably have customers that you need to visit sometimes. Naturally, you want to drive a good and neat car. You can choose to buy a car yourself, but it is also possible to lease a car. Below we list everything for you.

Investing in your business

Many entrepreneurs with a lot of savings choose to opt for a lease car. The big advantage of this is that you have money left over to invest in other things in your company. This way you promote the growth of your company. Moreover, unlike purchasing a car, you do not have to pay a lot of money for a car at once. When leasing a car, you spread the costs. This gives you more insight into monthly expenses.

Financial lease or operational lease?

The most commonly chosen lease form is financial lease . In addition, with a financial lease you are economically the owner of the car. You can compare it with a mortgage that you take out for a house: you become its owner in installments. You can also benefit from many tax benefits, provided you enter the car as an investment on your company's balance sheet. After the contract has expired, you do not have to return the lease car to the company. In addition to financial lease, you can also opt for operational lease. With operational leasing, the leasing company remains the owner of the car. So you actually rent the car from the company for a long time. When the lease contract has ended, you return the car to the company. This also means that you cannot optimally enjoy the tax benefits. You don't have to worry about the car: the costs for maintenance, repairs, road tax and car insurance are for the company.

Tax benefits

Business leasing offers many advantages for your sole proprietorship. This allows you to deduct certain costs from tax, which makes financial leasing particularly attractive. With a lease car based on Financial Lease, you are immediately the economic owner of the car, which means that the lease car appears on the balance sheet of your company. In that case, you may first deduct the interest. You may deduct the interest from the profit. Moreover, as an entrepreneur you can in many cases take advantage of the investment deduction if it concerns a bus, van or a car that you use for courier services. You can also depreciate the vehicle and reclaim the VAT. That sounds like music to your ears, right?

Report to the BKR

It is good to mention that a report is always made to the Credit Registration Bureau, also known as BKR, when you conclude a lease contract for your company. Many people think that this has negative consequences, but if you always pay your invoices on time, there is nothing to worry about. The other lenders will see that you always pay neatly. However, a lease contract can get in the way if you want to take out another loan. So consider a number of important things when you are thinking about a lease contract.