HIRE PURCHASE / LEASE PURCHASE

The traditional method of funding that allows you to spread the cost of goods over the period with ownership transferred to you at the end of the agreement.

This means that:
You own the goods at the end of the agreement.
You can claim back the VAT on the cost of the asset.
Tax relief is claimbable on the interest payments and you can also claim capital allowances.
Hire Purchase is treated as an outright purchase for tax purposes.

FINANCE LEASE

Another traditional method of finance where by the leasing company (LESSOR) buys the goods and then rents them to you (LESSEE) for a fixed period.

This means that:
Rentals can normally be off-set against profit for tax purposes.
VAT is reclaimable on rentals.
Continuation periods possible.
Maintenance optional.

CONTRACT HIRE

Method of acquiring goods without the problems of ownership.