WHAT IS FINANCE LEASE?
Finance Lease is a type of finance agreement available for businesses. This is when you lease the vehicle for an agreed primary period of time by making fixed monthly rentals with or without a final balloon. You are eligible for a secondary period of lease when all the rentals pertaining to the primary period have been paid. The secondary period of lease attracts a nominal annual rental, sometimes referred to as a peppercorn rental.
Why choose Finance Lease?
Risk or reward on disposal
VAT recoverable on rentals and hire allowance eligibility
Option to use the vehicle after the primary period
- The vehicle eventually has to be sold to a non-related third party and there is no option for you to own the vehicle
- Finance Lease also qualifies for hire allowances that can be offset against taxable profits
- There are no mileage restrictions/penalties, however excess mileage will affect a vehicle’s value at the end of the contract.
Please seek independent tax advice to find out which finance product is right for your business.