The practical answer
VAT treatment and timing depend on the agreement. Hire purchase and finance lease can create different cash-flow requirements, so review the specific proposal and confirm tax treatment with your accountant.
Ask for a schedule separating initial cash, instalments and VAT under the actual proposed agreement. Do not assume the supplier’s net advertised price is the whole cash requirement.
VAT recovery is a separate tax question and depends on the business and transaction. Confirm it with your accountant and allow for the timing of any reclaim.
Commercial finance is subject to status, lender approval and the specific asset and transaction. The right structure depends on the complete circumstances of the business.
What should I do next?
Have the asset details, supplier information and an outline of what the business needs ready. DCF can then discuss the requirement and identify which lenders may be suitable.
Read: VAT on asset finance →