Dont make do when you know it wont do

In today’s competitive market place it is essential that businesses are able to the keep up to date with the latest technology upgrades or environmental changes. Coupled with the tightening of budgets ITPS believes it is important for businesses to explore the leasing option. Many of our customers are finding that leasing is a cost effective way of keeping ahead of the competition.

The benefits of leasing are not simply to do with the cost of purchase; leasing equipment means that more capital remains in your account and budgets can go further. In addition to financing capital equipment increasingly it is being used to finance all sorts of business related items even software.

The most important aspect of leasing is that tax relief is available on the full lease payments at the highest tax rate you pay. So the final costs are very close to the cash purchase price but you don’t have to make do with equipment that wont do.

Cash vs Lease Example

For example, using an invoice value of £5000 if the equipment is leased for 3 years, paying rental charges every quarter with a highest tax rate of 40 percent, over the three years you will pay £6,138.00 on the lease.

However, tax relief will reduce this payment by £2,455.20 meaning that the net amount payable after tax relief is only £3,682.80.

Using the same invoice value as a cash purchase, as the tax relief is only available on the capital allowances on the equipment, the tax relief is only £1,325.00 and so the net amount payable after tax relief is £3,675.00.

The different between the two options is only £7.80, a minute cost difference which is outweighed by the benefits of not using outdated equipment

Just speak to your account manager at  ITPS for a cash vs leasing comparison.

For more on leasing go to the CF Group website