Hire Purchase or HP is a method of financing an asset where customers are required to pay the total VAT due on a cash purchase with the first rental payment, whilst enjoying the same tax benefits associated with a cash investment.
At the end of the agreement they have the option to own the equipment outright. In most circumstance you can still claim the writing down allowances as though you had made the purchase outright.
“After some great advice from Capital, Hire Purchase was the ideal solution for our business equipment finance.”
Benefits of Hire Purchase
- Having the equipment you need when you need it, not when budgets allow
- Fixed and structured payments that fit in with your budget
- Keeping working capital for alternative projects
- Tax - you can reclaim the VAT(subject to being VAT registered)and you may be able to claim capital allowances and also offset repayment interest against profits
- Protecting existing lines of credit for use elsewhere
Thinking about Hire Purchase?
Our team are on hand to provide answers to any questions you may have. Call us on 01792 365 011 or click below to get a quick, free quotation.