When shipping containers are purchased in one full payment it’s an asset that can’t be put against capital allowances.
This means the owner is not entitled to the full tax benefits at the end of the financial year, so can’t offset their profits from it.
So instead of purchasing containers in one payment many people are choosing to rent containers from a hire company for a monthly cost.
What does offset mean?
All companies have to pay corporation tax on any profits made at the end of each financial year.
However, a company can “offset” the amount of tax paid at year end against any investment in assets made during that financial year.
Hire company fees for shipping containers can be very expensive and can be considered a waste of money, because you will not own the container at the end of the rental contract.
That’s why Moorgate Finance have chosen to serve the container industry by offering lease funding solutions.
What is a lease?
A lease is an agreement by which the owner of the asset, known as the ‘lessor’, allows someone, the ‘lessee’, to use an asset in return for payment.
With a lease purchase the title is expected to transfer to the lessee.
When taking leasing a shipping container you will be entitled to claim back all the VAT from every monthly payment at the end of each quarter of the year.
Another bonus of lease funding is that the monthly rentals are 100% tax deductible, something you won’t get with a hire company. This also allows you to offset most of the interest, if not all of it.
Monthly repayments with lease funding are small and affordable and in the long term these payments will go towards you owning the asset at the end of your term agreement.
This is the most cost-efficient way to enable a business to expand their container yard, while keeping the majority of their cash flow intact.
With lease funding you will also be able to claim the maximum amount of tax available for a shipping container purchase.
If you own a container yard and have recently purchased several containers Moorgate Finance can help you to release capital from them, which is also 100% tax deductible.
This frees up working capital enabling you to spend it elsewhere in the business.
What can Moorgate Finance help with?
- Storage Units
- Land Purchases
- Security Systems
- Gates and Fencing
- Security Barriers
Our team of brokers have industry specific knowledge so can offer different ideas to help diversify your business to maximise your revenue.