How it works?
Paying cash outright for capital assets can be a significant drain on your company's working capital. Leasing allows you to buy any new/used equipment, payments are fixed for the length of the term and you will have ownership of the equipment.
Leasing is 100% tax deductible*, which means you can offset all of the payments against your tax bill, to make more profit whilst acquiring an asset at the same time.
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Interest lost from using
money from bank at 5%
Year 1 - £325.00
Year 2 - £341.25
Year 3 - £358.31
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Writing down allowance at 25%
Year 1 - £650.00
Year 2 - £487.50
Year 3 - £356.63
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| Total Interest Lost |
£1,024.56 |
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| Total Tax Allowance |
£1,494.13 |
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| Minus Tax Allowances |
£1,494.13 |
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| Minus Tax Allowances |
£1,024.56 |
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£6,500.00 finance (10% Deposit then 36 x £201.35
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| Total Interest Gained |
£1,024.56 |
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Finance Agreement =
100% Tax Deductible
(Total Repayments = £7,898.60)
Minus Tax Allowances at 40% £3,159.44
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| Total Repayments |
£7,898.60 |
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| Total Tax Allowance |
£3,159.44 |
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| Minus Tax Allowance |
£3,159.44 |
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| Minus Interest Gained on Capital |
£1,024.56 |
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* Please communicate and seek advice from your accountant in all matters regarding tax and capital allowance.
