Operating Leases

Where operating leases are used the finance company owns the asset and takes on the risks associated with it losing value over time.  This leasing option is worth considering for higher value assets or specialised plant, machinery or equipment.  You do not need to make an upfront payment to fund the entire capital cost of the equipment.

The rental payments are treated as expenses and are tax deductible and you are not able to claim capital allowances.  VAT can be reclaimed on the payments.

Service and maintenance may be included in the rental payment over the lifetime of the agreement.  The rental payment is linked to the future value of the asset.

Different finance companies have different products and some will allow you the choice of fixed or variable interest rates.
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