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- A Finance Lease allows you to essentially rent assets over a fixed period.
- VAT is charged with monthly rentals which reduces the initial outlay.
- Ownership of the asset always stays with the finance provider but at the end of the agreement you can continue to use the asset for a nominal annual amount.
- When you no longer need the asset a high proportion of the sale proceeds are given back as a rebate.
Benefits
- The asset is shown on your balance sheet.
- Usually low initial outlay.
- VAT collected throughout the life of the agreement.
- Helps with budgeting for both cash flow and growth projects.
- Can offset the monthly rentals against taxable profits.