Cash v Lease Comparison
With a simple calculation we can demonstrate the comparison between an NCS Hire Agreement and a cash purchase.
With an NCS Hire Agreement, tax relief is available on all rentals at the highest tax rate you pay.
In contrast, a cash purchase will allow tax relief only on the capital allowances on the equipment. This is currently 40% of the cost in the first year and only 25% in subsequent years based on a reducing balance each year.
As you can see from the example, the benefit received from the increased tax relief, covers or exceeds the hire charges paid over and above the purchase price of the equipment.