We often speak to clients who plan to use their hard-earned cash reserves to fund an office relocation or refurbishment project. This reflects the misconception that leasing is not cost-effective, however nothing could be further from the truth. In fact it’s is an ideal solution to meet the needs of expanding or changing organisations.
Leasing is a smart, highly tax-efficient way to create a beautiful new workplace without compromising future working capital or using up bank credit lines. By conserving cash and spreading the cost of a project over three or five years, you can instead use the cash to invest in the business rather than in a rapidly depreciating asset. Furthermore, having a large one-off refit invoice may leave your cashflow vulnerable which could restrict future development choices for your business.
The tax efficiency is a key benefit: If you pay for the furniture and refurbishment of your building from your cashflow, only a limited percentage is allowable for tax purposes. Because of the ‘intangible’ elements, the Revenue only allows you to claim capital allowances against approximately 65% of the project. However, if you lease the works, the repayments are 100% allowable unlike any other form of finance such as a bank loan. It’s the only way a project can be fully offset against taxable profits and it makes leasing the most tax efficient method of financing any office project.
About Plus Finance
Plus Finance specialises in arranging finance for customers buying furniture and refurbishing their working environments. We are the UK’s market leader in this arena and have links to a range of specialist funding partners which allows us to select the best and most competitive financial package for our clients. If you are planning a project, either for yourself or for your customers and would like a quote to see how leasing compares, please call us on 01494 783 773 or email us at [email protected]