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