Get the most out of the asset, then dispose of it when you’re ready
Finance leases typically enjoy a low initial capital outlay and the VAT, which is 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 , without obligation, request a copy of the contract terms for details of how the facility you are considering would be treated for your business, so that you can discuss this with your accountant or tax advisor.
The goods can continue to be used after the primary period, in exchange for a nominal continuing-period instalment. Although ownership never passes to you, when the goods are no longer required, a high percentage of the ultimate net sale proceeds is refunded as a rebate of the instalments.
How it compares: