Leasing Is 100% Tax Efficient

Quite often potential new customers ask us what are the advantages of our offer compared to outright purchase. Our immediate response is to highlight the inclusive 3 year warranty and the cash flow benefits. For example, you can lease a new iMac, with 3 years hardware warranty plus telephone and remote support for just £10.30 + Vat per week. Compare this to having to take out over £1200 to buy the same product, and you can see that keeping the money in the business to spend on marketing and alike could make a real difference.

One of the key advantages that we often overlook when speaking to people, is that leasing is tax efficient. But what does that mean? Essentially, leasing is 100% tax-allowable. As the user you don’t actually own the equipment, the lease company does. This means that the lease payments to be written off the Profit & Loss account rather than the Balance Sheet, where a depreciating item is classed as a liability. Depending on the rate of tax you pay the saving of 20-40% of the cost of the lease repayments goes to you.

Each repayment is categorised as a lease rental and as such, is able to be written off as a business expense, thereby reducing the tax paid on your company’s profits. If you decide to buy your equipment outright, you are only allowed to write off a percentage of the total cost, meaning that you may pay more tax than if you had leased.

If you too would like to benefit from our 100% tax efficient equation call us 0121 285 0098 or email info@localhost with your requirement.