Leasing is a well-established, tax efficient method of financing a wide variety of Capital equipment spreading the cost over a period of time to suit Cashflow, income generation or production timescales.

Practically every sector of the British economy takes advantage of leasing, from small "one man bands" through to large multi-national organisations.

Leasing is a contract between a finance company and a customer, giving the customer use of the equipment on payments of rentals over a period. When you lease equipment you make a series of regular payments, instead of large Capital Outlay.

The cash flow and tax relief benefits of leasing provide a very strong case against cash purchase. If you buy equipment outright the Capital invested becomes, in effect, tied up in a depreciating asset and may not represent the best use of vital capital within your business or deliver an income stream in line with the costs to the business of not having that capital available elsewhere.

Leasing on the other hand allows you to save resources for other purposes or opportunities.

No, Leasing is a revenue expense item which allows business' to preserve other credit lines or capital reserves - i.e. Bank facilities etc, Shareholders Capital, Dividends.

No. Payments are not affected by changes in interest rates ensuring certainty of costs over the term. The only way the amounts would increase during the leasing term is if the government chooses to increase the rate of VAT or corporation tax.

Title to the goods remains with the finance provider, however as all the repayments are fully allowable against tax as a revenue expense (in the same way as lighting, heating etc) it is a much more tax efficient means of obtaining equipment. Similarly under a lease, the equipment does not show on your company balance sheets therefore not needing to be depreciated over a fixed period. An additional benefit is the ability to adapt your equipment requirements in line with changing technology, without having to resort to additional capital spend or the issues of liquidating redundant assets.

A leasing facility allows businesses to keep up with changes in technology as your original installation can be altered either during or at the end of your lease period. The normal reasons for this is due to a customer's expansion of business and their changing needs