This is a ‘rental’ agreement rather than a ‘purchase’ agreement and we own the assets.  For this reason, it is treated a different way by HMRC.  It is a popular way of funding a broad spectrum of business assets.  You can normally sell the assets on our behalf at the end of the term or keep it for a nominal annual rental.

This is a flexible, tax efficient way for a business to acquire assets without using its cash reserves, similar to Hire Purchase.


  • Allows companies to acquire assets without significant drain on working capital
  • Fixed-rate funding makes budgeting easy as you have certainty of future expenditures
  • Flexibility of repayment structuring is available to allow for seasonal business and to reduce monthly outlay by factoring in a ‘balloon’ payment at the end of the term
  • You will generally be able to offset rental charges against profits and, if your business is VAT registered, you will be able to reclaim VAT on the rentals (in the case of a car, most businesses will be able to recover a portion of the VAT).
  • VAT is paid on the monthly rentals and at the end of the primary period, if the goods are sold, you will be refunded the majority of the sale price

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