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These are standard features which apply in most cases,
however there may be situations where these may not apply.

FeatureHire PurchaseFinance Lease
Customer claim capital allowanceYes
Yes
No
No
Eventual OwnershipYes
Yes
No
No
Interest allowable against taxYes
Yes
No
No
Rental allowable against tax (some restrictions for cars over £12k)No
No
Yes
Yes
Working capital & cashflow benefitsYes
Yes
Yes
Yes
Fixed interest rateYes
Yes
Yes
Yes
Variable interest rateYes
Yes
No
No
Fixed term and repayment/rental (subject to change in VAT)Yes
Yes
Yes
Yes
No VAT on repaymentsYes
Yes
No
No
VAT on asset cost reclaimable by youYes
Yes
No
No
VAT on rentals reclaimable (50% restriction on cars without private use)No
No
Yes
Yes
Potential to recieve a share in proceeds from asset saleNo
No
Yes
Yes
Tax treatments are in accordance with current Statements of Accounting Practice. The VAT and other tax restrictions described apply to new and some used cars. The restrictions do not apply to commercial vehicles and other assets.

The value of any tax benefits to you depends on your individual circumstances, the law and Her Majesty's Revenue & Customs (HMRC) practice, which are subject to change.

The information given on these web pages is for guidance only. It is not intended as a substitute for professional advice, and you should ask your accountant and solicitor to advise you in the implications for your business of any of the options shown above, as these may vary depending on your business circumstances.
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