Customer Benefits of Leasing

Preserve Working Capital - Think Revenue
Maintaining liquidity (i.e. available cash) is critical to the health of a business and is fully supported by the practice of leasing, which removes the need to tie up valuable cash resources in a rapidly depreciating asset; freeing up capital that may certainly be better invested elsewhere in your business. Leasing allows you to treat the acquisition of new equipment as a revenue rather than a capital expense.

Leasing is Highly Tax Efficient
Under a leasing agreement the total amount of all rentals payable in each tax year can be fully off-set against Corporation Tax over the life of the agreement. Only leasing enables you to write-off the full purchase price against Tax, linked to the expected useful working life of the equipment - which may be as short as 3 years for high tech products.

If you compare this for tax purposes to outright purchase (which provides only 25% Writing Down Allowance each year on a Reducing Balance Basis) it takes seven years to to write off 90% of the full purchase price against Tax.

It is not surprising to learn that over 30% of all capital equipment purchased in the UK is now leased.