Finance Leases typically enjoy a low initial capital outlay and the VAT, paid on each instalment, is therefore spread over the period of the lease. If a qualifying asset is used for business purposes and you are VAT registered (special rules apply) you may be able to recover some or all of the VAT applied to the lease rentals.
The availability and value of tax relief will depend on your individual circumstances – you can request a copy of the contract terms without any obligation so that you can discuss this with your accountant tax advisor for details and how the facility you are considering would be treated for your business.
The asset can continue to be used after the primary period, in exchange for a nominal annual continuing period instalment. Although ownership never passes to you, when the machine is no longer required, a high percentage of the ultimate net sale proceeds is refunded as a rebate of instalments
How it compares: