Tax efficiency of how you decide to finance machinery purchaseis a very complicated area

Financial advice for farmers

The clear advantage of the tax treatment of a tractor lease is that  tax savings are generated over a  period mirroring the finance term, meaning it is that bit easier to meet repayments, when the burden of tax is lessened.

The question often arises as to whether it’s more advantageous to use a finance lease to purchase a machine,  instead of hire purchase or finance by a normal commercial loan, or outright purchase.

The answer is that it depends on the circumstances at hand, with leasing more suitable in some instances and HP more suitable in other circumstances.