Leasing and Rental Options on Large Format Printers
There are many reasons to lease equipment, with the predominant one being that leasing allows you to spread the cost over a period of time.
Giving your business the power to grow.
With leasing arrangements, all payments are 100% tax efficient, often saving more than you would when paying cash.
With Design Supply, your monthly rentals are fixed at the outset of the agreement, with no charges to them even if the interest rate changes. This helps you budget more efficiently.
Leasing allows you to keep your cash in the bank, only having to pay a minimum deposit.
Because leasing spreads the cost of the equipment you may find you are able to afford a larger, more efficient large format printer than if you were paying upfront for the goods. This means you can get yourself the best and latest machine.
Our leasing facilities are available from 1-5 years, paying monthly or quarterly.
We pride ourselves not only on the quality of our products but on the services and expertise that we provide.
Lease Rental is 100% Tax deductible
The main reason that the majority of companies lease rather than purchase equipment is that 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. The title of the goods remains with the Lessor which means the equipment does not show on the company’s balance sheet, and therefore won’t depreciate over a fixed period. If a company brokers the funding, they are the “third party” involved within the lease agreements. In effect, the broker buys the equipment from the supplier and then sell it on to the customer. This means you can take all the advantages of leasing and still own it at the end!
How the tax advantages of leasing works – in numbers
You lease a machine that costs £5,000 + VAT, over a 3 year term.
The monthly payments would be £175.20 + VAT over 36 months
Total paid over the term of the lease £6307.20
19% tax can be reclaimed on the total lease payments over the 3 years, so a total of £1198.37. Therefore, the net cost of the lease is £6307.20 – £1198.37 = £5108.83*
At this point, you’ve saved yourself money and you’ve got a large format printer!
*Your accountant will be able to provide more information. This information is provided for guidance only.
Find out more:
Contact the Design Supply team for more information and a tailored quote.