Coffee machine leasing is the easiest way to finance your coffee equipment whilst freeing up capital for other investment in your business. Coffee machine leasing also qualifies you tax relief.
What is tax relief?
When leasing equipment a company is able to gain tax relief on 100% of their lease rentals against corporation tax.
How does this work and what is corporation tax?
Corporation tax is the tax applied to the company’s profit at the end of the financial year , which is set at 20%.
For every lease rental paid the company is able to claim 20% in tax relief against the corporation tax, so the business is able to keep the cash rather than paying it to the HMRC.
Company A makes £100,000 profit in their financial year and has to pay the tax of 20%:
£100,000 profit minus 20% corporation tax = £80,000 profit after tax.
The tax the company will have to pay is £20,000
Company B also makes £100,000 profit in their financial year and has to pay corporation tax of 20%:
The company also has £10,000 worth of lease rentals for the year:
£100,000 profit minus £10,000 lease rentals = £90,000
£90,000 minus 20% corporation tax = £18,000
So therefore company A pays £20,000 in tax and company B pays £18,000. Company B has saved £2,000 in tax.
Benefits of coffee machine leasing:
Keep cash to flow within the business rather than handing over a lump sum for a depreciating asset.
Enjoy fantastic tax advantages, payments are tax deductible unlike using cash.
Keep up with the latest technology with the opportunity to upgrade lease period.
Protect existing credit lines by using leasing as an alternative funding facility.
Spread the cost of VAT which is paid in installments rather than as a lump sum up front ( excluding hire/ lease purchase agreements ).
If coffee machine leasing seems like an amazing option for you then ask one of our advisors or sales team today.