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tomo

To lease or buy?
« on: October 04, 2005, 12:28:49 am »
Not sure if i got the wrong idea but ionics mention in their brouchure about leasing for 3 and 5 yrs some of their more expensive set ups from 3-6 grand. is it worth travelling this route to get a good system? can you claim all the lease money as 100 precent tax deductable? oh sorry it is their wfp systems i am talking about . some prices for a £3700 system start at £87:00 per month

kiral1404

  • Posts: 164
Re: To lease or buy?
« Reply #1 on: October 04, 2005, 08:35:06 am »
Regarding the tax side of leasing or buying equipment.

If you get the gear for £6k then its a capital allowance  40% can be claimed back this year (£2,400) then 25% of (6k-£2.4k) next year (25% of £3.6k, £900) and same for the 3rd year not sure how many years you can claim capital allowances for think its only 3.

IF you sell the equipment then you will owe the taxman.

Ian_Giles

  • Posts: 2988
Re: To lease or buy?
« Reply #2 on: October 04, 2005, 09:39:21 am »
If it is the same as leasing a van, then 100% of your costs regarding leasing go against tax (not the VAT element though).
But after 5 years it balances out apparently, at least in regards lease purchasing a van...or was that 7 years?

I'm sure that when you purchase equipment or vehicles you claim a percentage as Kiral has said, but I thought that continued to a zero point.
With leasing it is different, it is  the cost of leasing that goes against tax, the equipment doesn't belong to you, so it's value is irrelavant.
If you lease year on year then eventually what you spend on leasing will exceed any tax savings you had.

With vehicle leasing, there are ways around it, i.e. lease back or lease purchase, this way at the end of an agreed term the vehicle becomes your own, but at the end of the lease you are not allowed to own it! The leasing company tell you at the start of the lease what the residual value of the vehicle will be at end of term, and you either pay up that lump sum, or it is costed into your monthly payment so that at the end of term the vehicle is yours with no further monies being exchanged.
And unlike hire purchase, the ENTIRE cost of the lease goes against tax (VAT not withstanding of course).

Mt mind has now fogged up :-\ but that is the way I am going to be getting my own van.

I don't know whether this method can be applied to WFP systems though, I guess that depends on how the likes of Ionics do their leasing.

The best person to answer your question though, and at no more than the cost of a phone call............is the tax man himself ;)
Wear a garland of garlic, sprinkle the phone with holy water and they are quite safe to talk to...if you call on them in person, don't forget to take a wooden stake and a heavy mallet...just in case :o

Unlike the VAT men, they do have a heart for the stake (it'll take some finding, but its there somewhere ;D ;D)

Regards,

Ian
Ian. ISM CLEANING SERVICES

tomo

Re: To lease or buy?
« Reply #3 on: October 04, 2005, 07:44:17 pm »
thanks ian to both your posts very informative. Funny how we haven't met as i have cleaned windows in chepstow for ten years. Look forward to when we do. ;D
 

regards


tomo

kiral1404

  • Posts: 164
Re: To lease or buy?
« Reply #4 on: October 04, 2005, 08:01:58 pm »
You think you get your head round the tax equation and then you read something and scratch your head. Oh well guess i'll find out in jan

Roy Harding

  • Posts: 1973
Re: To lease or buy?
« Reply #5 on: October 04, 2005, 08:34:01 pm »
Hi Tomo

Do you get down Monmouth way at all ?

Roy

tomo

Re: To lease or buy?
« Reply #6 on: October 04, 2005, 08:39:17 pm »
Hi Roy, Heard alot of good things about you from tosh ;D no i dont do anything in monmouth my round started in chepstow in 96 i have 60 precent there the rest is in langstone caldicot lydney. i strategically stewn myself along the A48 ;D
 look forward to bumping into you i hear you got the best set up for wfp .

Roy Harding

  • Posts: 1973
Re: To lease or buy?
« Reply #7 on: October 04, 2005, 08:58:53 pm »
I think Tosh has been a bit to kind.

Do you know Alan lodge he lives in st brevals?

Roy

Ian_Giles

  • Posts: 2988
Re: To lease or buy?
« Reply #8 on: October 04, 2005, 10:57:09 pm »
Tomo,

I must have seen you in passing, you'll often see me in the town centre, I'm the only  one in the town centre using WFP on the shops & offices, if you see me, stop & have a chat ;)

And Roy has a darn good setup too ;)

Good to see yet another Window cleaner on the forum from our area ;D

Regards,

Ian
Ian. ISM CLEANING SERVICES

Re: To lease or buy?
« Reply #9 on: October 04, 2005, 11:02:48 pm »
Ian I think all the window cleaners in England operate your area.  They all seem to be around there.  I never see any!
Mind if I move to Chepstow? :-\

As to the topic question:  I am searching for a van right now.  Van dealer did some figures right in front of me, I'm not very mathematical, but he showed me fairly clearly that, there is no difference in tax relief either way over a 5 year period.

Pj
 

tomo

Re: To lease or buy?
« Reply #10 on: October 05, 2005, 08:47:36 am »
yes roy i know alan lodge really well a nice bloke and once a great footballer too. we play footy together once a week without trying to injure ourselves ;)

Ian_Giles

  • Posts: 2988
Re: To lease or buy?
« Reply #11 on: October 05, 2005, 09:27:04 am »
PJ,

As I said, after either 5 or 7 years it kind of balances out :-\
Depends on how often you change your vehicle, the longer you keep it, the more it evens out.
In the short term, leasing is more cost effective than hire purchase or a bank loan.

Before I take the final plunge though, I'll probably ring the tax man (with garland of garlic and holy water close to hand ;D) for his opinion.

And come to Chepstow by all means, the Metropolis of window cleaners on the forum! ;D

I wonder which area has the biggest cluster of window cleaners on here??

Within my area I know of 6 for sure.

Regards,

Ian
Ian. ISM CLEANING SERVICES

Moderator David@stives

  • Posts: 8829
Re: To lease or buy?
« Reply #12 on: October 05, 2005, 11:51:39 am »
I think i am the only one on here between plymouth and lands end ,which is about 100 miles east to west so i am on my own .i think christmas dinner will be interesting.I might have to make the effort and come to Tosh` dinner

Dave