Finance Lease

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

What is finance lease for business

ADDITIONAL INFORMATION

  • 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.