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HMRC internal manual

Business Leasing Manual

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HM Revenue & Customs
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The tax benefits of operating leasing: operating leases that function as loans: introduction

Finance leasing cash flows are predictable and lend themselves ideally to computer analysis using net present value analysis in one form or another, see BLM30400.

In contrast, a typical operating lessor has to make normal business judgments - how often will they hire out the asset over its life, what charges will the market bear in the future and how fast will the asset wear out or become obsolete? In such circumstances a net present value analysis is not a great deal of help. See BLM00045 onwards for more on operating leases generally.

However, in accountancy terms an operating lease is simply a lease that is not a finance lease and, in the right circumstances, the rentals can be calculated in much the same way as they can for a finance lease, see BLM31210.