Why Lease?
Leasing is probably the most popular method of financing new equipment today. Virtually any item of equipment can be leased from £1,000 to several hundred thousand pounds.
You may be able to afford to buy the equipment outright, but before you make this decision you must consider the following:
· All leasing payments are rental payments and as such are an allowable business expense, therefore if a business is making profits they reduce the profit by the amount of the rentals you pay each year which in turn reduces your tax bill.
· Lease payments are normally the same throughout the lease contract. This means that increases in interest rates do not affect you and enables you to budget your cash flow more effectively.
· Leasing enables you to save your cash for other purchases such as new stock, staff training, advertising, new business opportunities and unexpected happenings.
How Does Leasing Work?
With a lease the leasing company buys and owns the equipment, which (YOU) the business rents for a predetermined period.
At the end of the agreement, the agreement can usually be extended, you may be offered the option to sell the asset on behalf of
the lender, you may be able to buy the equipment at a market price, or the equipment can be returned to the lender.
Are there tax benefits associated with leasing?
Yes. Any business wishing to acquire capital equipment should seek the most tax efficient way when doing this. All lease payments are treated as an allowable business expense and therefore attract tax relief for the full duration of the lease agreement. Your accountant will be able to confirm this.
Who Leases?
Nearly every market sector large or small benefits from leasing, from new start business to large established companies.
All payments shown are subject to status and VAT at the relevant rate. We advise that before committing to any lease you discuss all options with your accountant regarding suitability and potential tax benefits.
Available for Limited Companies only
