For project options with a value over £2,500+VAT, you may be able to opt for a leasing arrangement to allow you to spread the cost with monthly payments.
Exact finance pricing, acceptance and delivery of the finance option are subject to a credit contract with our principal financing partner Reality Finance Solutions Ltd (www.realityfinance.com).
Your contract(s) with Data Technologies Ltd are independent of any contracts with our finance partner, and vice versa.
The major benefits of leasing are:
- Tax breaks mean leasing is not expensive (100% allowable against pre-tax profits).
- Many people believe leasing is an expensive option. This is simply not the case. This is why even large 'cash rich' companies are choosing to lease and 90% of FTSE 100 businesses lease all of their asset acquisitions.
- Finance lease rentals are 100% allowable against pre-tax profits, so the total cost of your customers purchase, capital and interest can be offset during the lease period, with 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!
- Leasing is quoted on the net value of your sale. Your VAT liability is on the monthly rentals only and this can be reclaimed in the normal way. Your corporation tax allowance can be claimed following normal accounting practices.
A cash purchase will allow tax relief only on the written down allowance on the equipment. This is currently 20% per year, clearly not as beneficial as leasing.
More information regarding this can be found from HMRC.