Tax Benefits : With leasing (Operating, Contract Hire and Finance) contract repayments are 100% fully tax allowable this differs from outright purchase options where only the capital allowances can be claimed against tax. If your potential purchase is made via a Lease/Contract Purchase or with a Practice Loan then you can also reclaim the interest charges against tax.



Cash-flow Benefits : By leasing you are not only preserving the working capital of a business but you are being more tax efficient. It will enable your business to use the working capital to invest for growth or in assets that have the potential to appreciate. Lease/Contract Purchase options also preserve working capital but are not as tax efficient compared to Operating and Finance Leasing options. Thus, outright purchase options will use up your available funds and are not as tax efficient. So is very important.

Credit and debt status : Operating Lease and Contract Hire options will preserve the credit status of a business as lease payments are normally classified as an expense and not debt -operating leases and Contract Hire arrangements are regarded as ?off balance sheet?. This therefore preserves the flexibility to utilise any further debt facility (from the bank/specialist lender) for other more growth focused requirements.

Balance sheet : If an asset is purchased (outright with a practice loan or with Lease purchase) or acquired using a Finance Lease then it will show on the balance sheet since it is ultimately owned by you. However Operating Leases and Contract Hire options keep assets acquired in this way off the balance sheet thereby further protecting your credit status.

VAT : With all other purchase options VAT is payable up front whereas with Operating and Finance Leases VAT is payable over the term of the lease thereby further protecting cash-flow.

Exposure to obsolete technology: Leasing options which enable the lessee to hand back the asset at the end of the agreed term help the lessee to benefit straight away from improvements in new technology associated with the particular asset. However if the asset has been purchased outright there is the challenge of finding a buyer for the older asset before a new purchase can be made. is best thing for professionals today.