Tax Advantages Of Leasing
Most of our customers use a lease to acquire their machinery. This is a highly tax advantageous means of purchase because every payment receives 100% tax relief.
Outright purchase: £5,000
Lease: £26.76 + VAT per week
(Paid by monthly direct debits of £115.98)
60 payments (5 years) £6,958.56
Maximum tax relief 40% £2,783.42
Cost after tax relief £4,175.14
A SAVING OF £824.86 AGAINST THE CASH PURCHASE PRICE
As you can see by the example above the lease can have considerable advantages so long as you are in profit. Amount of tax relief depends on your tax band (22% / 40%).
1. The tax relief can actually reduce your overall cost
2. You don't have to endanger your liquid cash flow purchasing new equipment when you can invest in stock and increase your profits.
End of Lease
During the lease period (normally 2-5 years) you are renting the system and for that reason you are gaining your 100% tax relief. At the end of the period you either return the equipment or purchase ofor a small administration fee depending whether you choose lease rental or lease finance your vending machine.
*Capital allowances can be claimed against equipment bought outright at a value of 25% of the written down value of the goods, depreciating year on year.