Hire purchase is a direct repayment process through which you eventually own your asset. Repayments can be planned to be flexible and structured with initial payments or balloon that is final lump sum payment.
Features And Other Benefits
- You can have total control over your assets with ownership
- With ownership, it will also carry potential to claim writing down capital grants, allowances including improved first year allowances
- You can normally reclaim the VAT over the asset cost
- The interest over the repayments can be claimed for relief in tax
- The assets can appear on your yearly balance sheet
What Can Be Included As Asset
Typically, all kinds of equipments, plants, vehicles and machinery can be included as an asset.
Frequently Asked Questions:
Q1. What type of tax allowances will I be allowed to claim?
You will be able to claim the writing down allowances over the asset cost price as it appears on the agreement. The interest over the repayments can qualify for relief in tax.
Q2. Will I be able to reclaim VAT over the payments?
If you are registered for VAT, you will be able to reclaim the VAT that is payable on the asset purchase cost.