Hire Purchase/Lease Purchase
- A typical deposit of 10% plus the VAT (on the cost of the asset) is normally required with the balance repayable over 2 - 10 years, depending on the asset.
- VAT deferments are possible to assist with cash flow.
- Interest rates can be either fixed for the agreement term or variable linked to funding costs.
- The asset and associated hire purchase are shown on your balance sheet.
- Your business claims any writing down allowances for offsetting against tax.
- When the finance agreement has been repaid you own the asset.
