Lease Purchase

• An agreement to purchase a vehicle usually by installments over the term agreed with a final payment (balloon) being made to acquire the title to the vehicle.
• The balloon payment may be an estimation of the future resale value.
• Title does not pass until all payments have been made, but tax and accountancy treatment assumes you have title from day one.

• Pure and simple purchase plan for a vehicle with flexibility by deferring part of the vehicle capital payment to the end.
• Is shown as a company asset on your balance sheet thereby attracting standard capital allowances and interest is usually offset against Corporation Tax liabilities.
• No VAT is payable on the repayments.

• The outstanding debt must also be shown on the balance sheet.
• All vehicle running costs including the risks are yours.
• There will be a charge if you return the vehicle early.