Current Issues

Finance for business investment 

Asset finance has an essential role in supporting business investment as the UK’s economy recovers. The Government can help by ensuring that tax allowances continue to reflect the real costs of investment in new equipment and allowing businesses to benefit from allowances whether they decide to buy or lease. The current tax system for leases should be simplified to make it easier for small companies that are not yet profitable to benefit from allowances by leasing.  

International lease accounting rules 

Having estimated that the International Accounting Standard’s Boards (IASB) proposed new rules for lease accounting could create over 75 new regulatory steps for lessees, we called for a simpler alternative. The proposals are being improved but it is important that the new rules should be published for consultation before they are finalised.  

Leasing low-carbon equipment 

FLA members have started to finance energy-saving and generation equipment, including micro-generation and combined heat and power systems. Asset finance can help many businesses to afford to invest in energy-saving plant and machinery. However the Government’s incentives for such investment – Enhanced Capital Allowances - currently exclude leased equipment. Removing this exclusion would help deliver substantial energy efficiency improvements in small and medium-sized businesses.  

Leasing in the public sector 

In the new financial climate, schools, hospitals, local authorities and central government departments are all taking a fresh look at the advantages of leasing. It is important that the benefits of leasing are properly understood, and that artificial barriers – including public sector accounting and procurement rules – are removed.