- Original Poster
- #1
Morning everybody
Long story short, I need a new iMac. It will be solely for business use.
I am looking at options and I see 2 main options- lease/rent or buy. If necessary, the business can afford to buy it but all else being equal I would prefer a regular monthly amount. If the business purchases it, it would give up a small interest payment on the funds, and possible CT savings. I can also afford to buy it personally and can use an interest free payment option over 12 months (available only to personal purchases).
I have done some research and subject to formalising the agreement I see that I can purchase it personally and lease it to my company at market rate.
Numbers are:
Purchase price £1750
Lease through a company £60/month. I return the asset after 36 months, extend the lease or buy at fair market rate. I would assume that this is say 25% of purchase price so £425.
36 months at £60 is £1800.
I am not looking to charge above market rate.
I am not VAT registered, nor likely to be in next 5 years.
I have a PAYE job which already puts me into 40% tax. I already have to complete a self declaration form.
Is it worthwhile to buy personally and lease to my company or not worth the hassle from a tax perspective?
If I did lease it to myself, would I have to account for the full lease payment as income, or only the profit element? I dont have a concern with adding it to a self declaration but for probably £500 max "profit" over the lease, it isnt worth doing much more than that. I want to understand the rules, not avoid them- the alternative is that the business just buys it, not that I dont declare something!
Thanks
Mark
Long story short, I need a new iMac. It will be solely for business use.
I am looking at options and I see 2 main options- lease/rent or buy. If necessary, the business can afford to buy it but all else being equal I would prefer a regular monthly amount. If the business purchases it, it would give up a small interest payment on the funds, and possible CT savings. I can also afford to buy it personally and can use an interest free payment option over 12 months (available only to personal purchases).
I have done some research and subject to formalising the agreement I see that I can purchase it personally and lease it to my company at market rate.
Numbers are:
Purchase price £1750
Lease through a company £60/month. I return the asset after 36 months, extend the lease or buy at fair market rate. I would assume that this is say 25% of purchase price so £425.
36 months at £60 is £1800.
I am not looking to charge above market rate.
I am not VAT registered, nor likely to be in next 5 years.
I have a PAYE job which already puts me into 40% tax. I already have to complete a self declaration form.
Is it worthwhile to buy personally and lease to my company or not worth the hassle from a tax perspective?
If I did lease it to myself, would I have to account for the full lease payment as income, or only the profit element? I dont have a concern with adding it to a self declaration but for probably £500 max "profit" over the lease, it isnt worth doing much more than that. I want to understand the rules, not avoid them- the alternative is that the business just buys it, not that I dont declare something!
Thanks
Mark
