SECTOR INSIGHT
Finance from Kennet Equipment Leasing working with SKS Limited t / a JMA UK
» HAVING THE BEST EQUIPMENT FROM JMA needn ’ t be cost prohibitive . We work alongside Kennet Equipment Leasing , who can assist with both Lease and Hire Purchase options to suit your requirements . Here our Kennet account director Mark Suckley explains the benefits of leasing .
What is a finance lease ?
Essentially , Finance leasing enables the business to acquire the assets needed to maintain a business , without needing to buy the asset outright .
The tax benefits of leasing explained
LEASE RENTAL IS 100 % TAX DEDUCTIBLE - The main reason that the majority of companies lease rather than purchase equipment is that they use leasing as a method of reducing their tax bills . This is because lease rental is 100 % tax deductible , and all payments made for the equipment are written off against the company ’ s tax bill . For any profit-making business , this means a substantial saving in the real cost of acquiring equipment by lease rental . This could mean a saving of between 20-40 % of the lease payments , depending on the rate of tax you pay *. Payments on qualifying leases are written off as direct operating expenses , rather than a debt or outstanding liability , thus reducing short term taxable income .
Any capital allowances are passed on to you , and lease payments can be offset against taxable profits . VAT can also be reclaimed on monthly payments . This status as a “ lease ” as opposed to a “ liability ” on a company ’ s balance sheet is something the banks like to see , which is why an operating lease can be attractive . For this reason , leasing is often referred to as ‘ off balance sheet ’ financing – a tremendous advantage to both large and small businesses .
OWNERSHIP AT THE END OF THE LEASE - Lease rental is just that , a rental or hire agreement . Title of the goods remains with the Lessor ( either Kennet or assigned to one of our panel of lenders ) which means the equipment does not show on the company ’ s balance sheet , therefore not needing to be depreciated over a fixed period . If Kennet broker the funding , they are the “ third party ” involved within the lease agreements . In effect , Kennet buys the equipment and will relinquish title for one further monthly payment , we will then have no further financial interest in the equipment . This means that the customer can take full advantage of all the benefits of leasing .
Other benefits of leasing
• Flexibility in terms of length of agreement , rental repayment profile and end of lease options .
• Unlike making an outright purchase , you will retain cash within your business .
• Effective financial planning . The lease repayment profile gives you confidence in being able to budget for the lifetime of the asset .
• Tax advantages
• Using the latest assets will ensure you remain competitive by keeping your costs low .
• Fast turnaround times
• Potential to carry on using the asset at the end of the lease period for a nominal payment
‘ Having the best equipment from JMA needn ’ t be cost prohibitive ’
Things to be mindful of :
Non-payment could negatively affect the credit rating of the business and the guarantor and could result in the asset being re-possessed .
For more information or to arrange a lease quote please contact the Sales Team ( sales @ jma-uk . co . uk ) or your local Business Development Manager .
All finance products are subject to status and affordability checks . Terms and conditions apply . We do not give regulatory or accounting advice . Please see you accountant for information . These finance products are for business purposes only . Kennet Equipment Leasing Limited is authorised and regulated by the Financial Conduct Authority , FRN : 646024 , for Credit Broking and Lending . We work with a panel of lenders .
MARCH 2024
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