VAT Benefits:
If you use us to fund the equipment, we will pay the entire supplier invoice including VAT element. The quotation is presented in ‘net’ terms, as a large proportion of businesses are VAT registered and can claim the VAT back. However, if your business is not VAT registered, using us could still be a benefit. Leasing charges are NOT applied to the VAT element, so your business simply pays VAT on each rental, spread across the agreement term. Then if your business does become VAT registered in due course, you can start claiming back the VAT on each rental.
Tax Relief:
A typical Business pays 19% tax on annual profits. So a business making a profit of £30,000 would pay tax of around £5,700.00. Lease rentals are fully tax deductible, including the VAT element too, if the business isn’t VAT registered. The illustration below, is what a typical profitable business could save / offset in tax, across the contract term. As you can see, the potential tax savings offset the leasing charges. Many profitable businesses use this style of finance to acquire their equipment, to obtain tax savings and keep their cash for other uses.
To find out more useful information about the benefits of leasing, click here
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