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A tax efficient form of funding, providing the
ability to charge the rentals against taxable profits. Particularly
appropriate if it is likely that there will be insufficient taxable
profits to enable the claiming of all the available capital allowances.
Instead JCB Finance obtain the capital allowances and reflect these back
in the rentals which are fixed for the primary period. There is a low
initial capital outlay and the VAT, paid on each rental, is therefore
spread over the period of the lease. The machine can continue to be used
after the primary period, in exchange for a nominal annual continuing
period rental. Although ownership never passes to the customer,
when the machine is no longer required, a high percentage of the
ultimate net sale proceeds is refunded as a rebate of rentals.
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