Hire Purchase

Hire Purchase is an agreement to hire with an option to purchase at the end of the term.

Title to the equipment remains with the finance house until all the instalments and the option to purchase fee have been paid when title then transfers to you. 

The whole of the VAT on the whole purchase price is paid at the front end by you and recovered via your VAT return. VAT Deferments can be considered.

You are seen to be the beneficial owner of the machine by the HMRC and the machine appears as an asset on your balance sheet and you can claim the capital allowances.  Interest is deductible against tax.