These are standard features which apply in most cases,
however there may be situations where these may not apply.
|Feature||Hire Purchase||Finance Lease|
|Customer claim capital allowance||Yes||No|
|Interest allowable against tax||Yes||No|
|Rental allowable against tax (some restrictions for cars over £12k)||No||Yes|
|Working capital & cashflow benefits||Yes||Yes|
|Fixed interest rate||Yes||Yes|
|Variable interest rate||Yes||No|
|Fixed term and repayment/rental (subject to change in VAT)||Yes||Yes|
|No VAT on repayments||Yes||No|
|VAT on asset cost reclaimable by you||Yes||No|
|VAT on rentals reclaimable (50% restriction on cars without private use)||No||Yes|
|Potential to recieve a share in proceeds from asset sale||No||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.
|View Hire Purchase||View Finance Lease|