B2B finance available

Latest Blogs

Pressure Washer Nozzles - Type and Size GuideA Guide to Professional Pressure WashersBreak Tank for Water Category 5 AB Air GapHow to safely charge lithium-Ion batteriesOil Tank Replacement, Installations and RemovalsDealing with an oil spill at homeWhat Are The Advantages of an Inverter Generator?How to increase or boost water pressureFuel tank service, site audits and dispensing equipmentProblems with Watchman Sonic? Troubleshooting and helpWater Bowser GuideB2B finance availableFuel management systemsFuel tank cleaning and gas freeingCommercial oil tank installations

B2B finance available

We are proud to announce we can now offer Kennet Equipment LogoBusiness-to-business finance on purchases over £1000, excluding VAT. Our provider, Kennet Equipment Leasing, has given many helpful information and benefits below.  

  • Fixed rates for the duration of the agreement
  • Major tax benefits – each payment is 100% tax-deductible
  • The equipment can be earning your next payment from day one
  • No need to have bank loans, overdrafts, or pay cash
  • Fast application turnaround
  • Spread the cost of your equipment purchase
  • Protect existing lines of credit and preserve cash flow for business growth

All payments shown are subject to businesses trading under three years, status and VAT.  The tax relief shown is for illustration purposes only. Please get in touch with us to discuss how tax relief can work for you, or your accountant will be able to clarify matters for you. Please note there is a documentation fee due with your first lease payment. Options are available at the end of the lease; contact us for more information.

The tax benefits of leasing are explained.

Leasing converts a significant capital expenditure into small monthly payments.  The company, therefore, has the profit-making equipment immediately and keeps its cash reserve available.
Rather than investing the precious cash reserves in depreciating assets, the company can use them to help increase profits.

Lease rental is 100% tax deductible.

The main reason that most companies lease rather than purchase equipment is that they use leasing to reduce their tax bills.  This is because lease rental is 100% tax-deductible, and 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 acquiring equipment by lease rental. This could mean saving 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. The 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 called ‘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 (either Kennet or assigned to a bank), which means the equipment does not show on the company’s balance sheet and, therefore, does not need to be depreciated over a fixed period. If Kennet brokers the funding, they are the “third party” involved within the lease agreements. In effect, Kennet buys the equipment from the supplier and then sells it to the customer. This means that the customer can take full advantage of all the leasing benefits but still own it at the end.

The disadvantage of buying equipment outright

The disadvantage of buying equipment outright is that the capital invested becomes a depreciating asset. This is an asset whose value decreases over time.

The total amount that assets have depreciated during a reporting period is shown on the cash flow statement and makes up part of the expenses shown on the income statement. The amount that assets have depreciated by the end date is shown on the balance sheet.

The tax advantages of leasing – in numbers

You lease a machine that costs £5,000 + VAT over a 3-year term.

The monthly payments would be £195.90 + VAT over 36 months

Total paid over the term of the lease £7052.40

19% tax can be reclaimed on the total lease payments over the three years, so a total of £1568.64. Therefore, the net cost of the lease is £7052.40 – £1568.64 = £5712.44*

*Your accountant will be able to provide more information. This information is provided for guidance only.