What is Business Leasing and How Does it Work?

While the implementation of sequestration cuts has enabled the federal government to reduce its budget deficit, it has also placed a strain on the nations citizens and commercial operators. With this in mind, businesses are being forced to pay careful attention to their levels of spending in a bid to create a more stringent budget. An effective way for business owners to cut costs is to consider business vehicle leasing, which enables them to manage a fleet of company cars in an affordable and efficient manner.

 

The Facts About Business Leasing 

With this in mind, what exactly is business leasing and how suitable is it for your business? Consider the following:
 
The Nature of Business Leasing: Business leasing is categorized as the leasing of personal property to serve commercial purposes. In terms of automobiles, it enables businesses to lease a fleet of vehicles and manage these to fulfill numerous tasks and operational goals. It offers a alternative to engaging in daily car rental deals or encouraging employees to use their own vehicles, and it is ideally suited to businesses that place a heavy emphasis on commercial travel, face to face sales or the transportation of goods.

 

Financial Savings in Relation to VAT: If your firm is registered to pay VAT, business leasing also provides an excellent way of reclaiming a percentage of your revenue. If your fleet of company vehicles are used exclusively for business purposes, there is a unique opportunity to reclaim 100% of the associated VAT and provide a significant boost to your coffers. Even if vehicles are occasionally used for personal use, you may still be able to reclaim up to 50% of the finance element under the terms of general business leasing.

 

Tax-Efficient Structure: Another interesting financial aspect of business leasing is that it offers corporations access to tax-efficient savings. This type of arrangement is usually funded by monthly repayments, which in turn are tax deductible expenses that will help you to reduce your annual financial bill. With taxation levels and inflation continuing to rise throughout the U.S., the opportunity to improve your firms tax efficiency can have a big impact on its annual turnover and profitability.

 

The Bottom Line

Business leasing represents an interesting option for firms in 2013, especially when you consider the wider economic uncertainty and volatility that is present throughout the U.S.. If you are keen to apply this strategy as a way of enhancing your businesses performance. consider Hitachi business leasing for all of your commercial vehicle needs.