Leasing
Have you ever thought of leasing your equipment and spreading the payment costs?
Leasing your equipment has a number of significant benefits.
- Affordable Monthly Repayments - allowing you to plan your budgets
- Quality Assets - While leasing an asset, the ownership of the asset still lies with the lessor whereas the lessee just pays the monthly expense. Given this agreement, it becomes plausible for a business to invest in good quality assets which might look unaffordable or expensive otherwise.
- VAT is paid on each monthly payment, saving a large upfront VAT payment.
- Tax Benefits - Lease payments are considered as operating expenses, and hence, of interest, are 100% tax deducible - See example below
Tax Relief Example Leasing V Upfront Purchase
| PURCHASE |
|
LEASE RENTAL |
| YEAR |
CAPITAL ALLOWANCE |
TAX RELIEF |
|
YEAR |
CAPITAL ALLOWANCE |
TAX RELIEF |
| 1st |
18% of £1,000.00 = £180.00 |
Less 20% = £36.00 |
|
1st |
12 rentals of £35.92 |
Less 20% = £86.22 |
| 2nd |
£1000 - £180 allowance = £820
18% of £820.00 = £147.60 |
Less 20% = £29.52 |
|
2nd |
12 rentals of £35.92 |
Less 20% = £86.22 |
| 3rd |
£820 - £147.60 allowance = £672.40
18% of £672.40 = £121.03 |
Less 20% = £24.21 |
|
3rd |
12 rentals of £35.92 |
Less 20% = £86.22 |
|
|
|
|
|
|
|
| TOTAL TAX RELIEF WHEN PAYING CASH - £89.73 |
|
TOTAL TAX RELIEF WHEN LEASING - £258.66 |
Calculations Based On:
Equipment Price £1000.00 plus VAT
Lease Term 36 Months
Company’s Tax Rate 20%
The above is an example, we recommend you speak direct to your own accountant regarding calculating your tax benefits.
Would you like a free no obligation quote? - Click Here of call 01743 289418 for more information.
Please note leasing is available subject to credit approval.
