Tax breaks mean leasing is not expensive!
Many people believe leasing is an expensive option. This simply is not the case. This is why even large ‘cash rich’ companies are choosing to lease.
Unlike many high street bank facilities or overdrafts that are subject to the change in market conditions, a lease facility with its protected payment and fixed interest rates allows for effective future budgeting.
100% allowable against pre-tax profits!
Because finance lease rentals are 100% allowable against pre-tax profits, the total cost of your purchase, capital and interest can be offset during the lease period, with your payments deducted as a trading expense. Contrary to popular belief leasing is not expensive, in fact the real cost of your lease can be significantly lower than the payments you make!
A cash purchase will allow tax relief only on the capital allowances on the equipment. This is currently 40% of the cost in the first year and only 25% in subsequent years based on a reducing balance each year.