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| Flexi Rent |
What is FlexiRent?
The substance of an Operating Lease is similar to the Finance Lease in that substantially all the risk and rewards incidental to ownership remains with the Lessee
(The Lessor however takes commercial risk in the asset financed, in the form of a Residual Value)
How does FlexiRent work?
The customer "rents" the asset for an agreed term and makes regular repayments that include proportions of capital, interest charges and VAT
Residual Value not less than 11% of original cost excl. VAT
FlexiRent - Operating Lease
- Income Tax Treatment
- The Lessee deducts the lease rentals
- VAT Treatment
- The Lessor charges VAT on each rental amount.
- The Lessee can claim VAT input where the asset allows
- Accounting Treatment
- The asset is recorded as an "off-balance sheet" item ( subject to independent auditor approval)
- The outstanding debt is shown as a note on the Balance Sheet
- The Lessee deducts Rentals as an operating expense
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