An example of finance lease v outright purchase
| |
Amount
(£) |
Allowable
(£) |
Rate
(%) |
Tax Saving
(£) |
| Year 1 |
10,000 |
5,000 |
30 |
1,500 |
| Year 2 |
5,000 |
1,250 |
30 |
375 |
| Year 3 |
3,750 |
937.50 |
30 |
281.25 |
| Year 4 |
2812.50 |
703.13 |
30 |
210.94 |
| Year 5 |
2109.37 |
527.34 |
30 |
158.20 |
| |
|
|
Total: |
2525.39 |
Cash Example
Cost = £10,000.00
Rate = £70.00
Customer paying tax at 30%
CASH: Customer claims 50% written down allowance in the first year and 25% there after against the rate of tax on reducing scale.
| |
Amount
(£) |
Allowable
(£) |
Rate
(%) |
Tax Saving
(£) |
| Year 1 |
2800 |
2800 |
30 |
840 |
| Year 2 |
2800 |
2800 |
30 |
840 |
| Year 3 |
2800 |
2800 |
30 |
840 |
| Year 4 |
2800 |
2800 |
30 |
840 |
| Year 5 |
2800 |
2800 |
30 |
840 |
| |
|
|
Total: |
4,200 |
Leasing Example
Cost = £10,000.00
Rate = £70.00 £700 per qtr £2800 + VAT per year
Customer paying tax at 100%
CASH: Customer claims 100% of rentals against tax.
Total rentals £2800 x 5 = £14,000 less taxable savings = £9,800 + VAT
This shows that a lease option for companies paying corporation tax outweighs outright purchase.
ALTERNATIVE PAYMENT METHODS
INTEREST FREE OPTION
Why not spread the cost of your equipment from us over a 10 Month Period?
Please call us for more details.
CREDIT CARD PAYMENT
We accept all major credit cards such as Master Card, Visa, Maestro
BACS PAYMENT
To use the BACS payment facility, please call us for more information.
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