I’m afraid EDC you are looking at the system wri=ong. tgere are two parts of lease=ingca Motability car, the charity, which is responsible for administrating a scheme but it contracts to Motability Operations Ltd for the supply of lease vehicles and the company paid each month by the system for your lease. Mitability Operations is not a charity, rather a PLC and is there to make a profit.
I’ve seen a few charities work in this way, a company designed to make profit as a direct subsidiary of the charity. However, in most cases all the charity senior management that are also on the Ltd Company’s board are paid by the charity. All profits from the company should also be ‘donated’ to the company. This maximises the income for the charity whilst taking advantage of VAT controls for income/expenditure.
The advantage Motability Ltd has is that it makes a huge number of purchases of assets that decrease in value. So, where most companies have to pay a VAT bill quarterly because they took their purchases and made a profit from selling them, Motability take money from Government but have a specific VAT exemption. Thus their purchase VAT can all be reclaimed less anything they receive in selling the cars.
This results in huge profits which should be donated to the charity who use a good chunk to make grants to those unable to pay the APs required to keep the profits up – thus generating it’s own cycle of money.
I’d love to have a look at the workings of their cash flow, I’m pretty sure there’s the odd twist in there to appear to be doing the right thing whilst ensuring the board are living well above the poverty line.
I'm Autistic, if I say something you find offensive, please let me know, I can guarantee it was unintentional.
I'll try to give my honest opinion but am always open to learning.
Mark