Hire purchase agreements are a purchase by instalment facility providing the customer legal title to the equipment after the completion of all finance repayments. However for tax purposes, the customer is regarded as the owner from commencement. As long as the equipment is used to generate income for the business the depreciation and interest charges that relate to the hire purchase are tax deductible. Goods are invoiced to the lender and the customer normally pays fixed instalments over an agreed period.
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