Hire Purchase

Hire Purchase provides the benefits of ownership without incurring the full capital outlay at the outset. Payments are agreed in advance and are fixed for the life of the agreement.

The full VAT, or the VAT difference if a part exchange is included is normally payable on signing the agreement but can be reclaimed in the normal way since the finance agreement is acceptable as a VAT invoice.

Title passes at the end of the agreement when the payments are complete and the option to purchase is exercised. However, because the intention to purchase exists from the outset, capital tax allowances and the available relief can be claimed from the point the equipment is brought into use.
The machine must be comprehensively insured by the purchaser.


  • Simple, straightforward product. VAT is paid up front and the customer makes their own arrangements for maintenance, repairs and servicing.
  • Tax advantages. As well as reclaiming VAT (if VAT registered), your customer may be able to claim capital allowances and also offset repayment interest against profits.
  • Flexibility. Your customer chooses how the finance is structured. With a flexible deposit, fixed or variable payments, and the option of a final balloon lump sum payment at the end of the agreement.
  • Ultimate ownership. Your customer has the right to buy the asset at the end of the agreement term.
  • Seasonal payments. Offered for the agriculture market to tailor repayments to meet their seasonal income.

T&Cs will apply, subject to status and affordability. Any asset used as security may be at risk if you do not repay any debt secured on it.