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 Period3 Years

FrequencyQuarterly

Company Tax Rate19%

Cash Purchase
Cash Purchase

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
Cash Purchase
Lease Rental

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

Tax Relief

Discover how these tax benefits work in further details.
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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?

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