Less tax for lessees
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I thought you might like to bring to the attention of your readers a possible saving on their leasing payments. Now that the Finance Act (No 2) has received Royal Assent, the corporation tax rate for the year 1997/98 has been reduced to 31%.
Any leasing agreements entered into prior to April 1997 will have used an assumed rate of 33% in calculating the leasing company's rate of return.
Most leasing agreements will have a clause allowing For the monthly payments to be varied on a change in corporation tax, therefore lessees should contact their leasing company to ensure they receive the benefits of this reduction.
Many leasing companies will automatically notify lessees but some may place the onus on the lessee to request this reduction. Any reader currently signing up to a lease should check the corporation tax clause as there is a proposal to reduce corporation tax to 30% from 1 April 1999. I hope you find this information of value.
Liam G O'Conner IPFA, BecIfOrds, West Yorkshire.