Is my tax situation improved by leasing capital equipment?

There are a few options:

Using a lease option, VAT is payable on the payments as they fall due throughout the lease period. When you acquire an asset using lease purchase, the VAT is paid in full up front. In both instances you should be able to claim the VAT back if you are registered. Seek advice from a chartered accountant .

Under a lease-purchase option, you can claim the Writing Down Allowance. This allows you to offset a percentage of the asset you have purchased’s value each year against your tax liability. Under the finance and operating lease options, the lessor is the owner of the assets and claims the Writing Down Allowance. The lessor, however, will reflect some of its benefits to you through the lease price.

With a lease you can offset the payments in full against your tax liability. With hire purchase you can offset any interest paid on the loan against tax.

Other Business Finance Frequently Asked Questions:

• Are you an independent financial adviser?
• Why is it believed that business finance such as bank borrowing and leasing is better than using your own cash?
• Does the NACFB provide me with any support or protection?
• Is my tax situation improved by leasing capital equipment?
• Can I borrow more than 70%?
• Do I need a solicitor?
• If I have bad debt and ccjs can you help?
• My bank is calling my loan in as they no longer want the debt. Can you help?
• How do I appoint you and do I pay you now?
• Are grants easily available?