Commentary

V7.406 Cash flow improvement—leasing rather than buying vehicles

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.406 Cash flow improvement—leasing rather than buying vehicles

Part V7 Tax planning | Commentary

V7.406 Cash flow improvement—leasing rather than buying vehicles

One decision taken by a company with cash flow difficulties could be to lease vehicles rather than buy them as an outright purchase.

The implication of leasing an asset is that VAT is usually charged on monthly hire payments made to the leasing company rather than when the asset is initially purchased by the business. The leasing company will often issue an annual tax invoice in advance, which serves as evidence for the lessee to reclaim input tax on each monthly payment. Be sure to resist the temptation to claim all of the

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