Lease vs Buy
Leasing is a very cost-effective way to invest in business equipment.
In addition to its many benefits this option competes very well in simple monetary terms.
*Take a look at our lease vs buy example below.
Equipment Cost: £7,500 Lease Period: 3 Years Frequency: Quarterly Company Tax Rate: 19%
Equipment Cost: £7,500
Lease Period: 3 Years
Frequency: Quarterly
Company Tax Rate: 19%
Total Tax Relief
639.30
| Year | Capital Allowances | Tax Relief |
|---|---|---|
| 1 | 18% of £7,500 = £1,350 | Less 19% = £256.50 |
| 2 | 18% of £6,150 = £1,107 | Less 19% = £210.33 |
| 3 | 18% of £5,043 = £907.74 | Less 19% = £172.47 |
| Total Tax Relief: £639.30 | ||
Total Tax Relief
1,752.75
| Year | Capital Allowances | Tax Relief |
|---|---|---|
| 1 | 4 rentals of £768.75 | Less 19% – £584.25 |
| 2 | 4 rentals of £768.75 | Less 19% – £584.25 |
| 3 | 4 rentals of £768.75 | Less 19% – £584.25 |
| Total Tax Relief: £1,752.75 | ||
By choosing to lease, the company has saved £1,113.45 in tax relief
*Illustrative and appropriate to current levels of taxation.
Tax Relief
Discover how these tax benefits work in further details.
Why Lease?
1
When leasing you will get your equipment straight away, rather than when budgets allow.
2
A lease option is simple and safe – with the fixed cost throughout the lease period there will be no changes or unpredictability to watch out for.
3
Your business can stay up-to-date with the latest equipment! Leasing provides you with the option of upgrading the equipment at any stage throughout the agreement by simply restructuring the payment schedule.
4
Offset 100% of the rentals against your tax liability to maximise tax efficiency.
Lease vs Buy
Did you know by choosing to lease, you could receive fantastic tax benefits?
What Else Can I Lease
Learn more about what you can lease. If it is not listed, get in touch & we can help.