The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
Assets bought on hire purchase (HP)
If an asset (eg a machine) is acquired via an HP agreement, the company will simply pay for the asset over a period of time, normally on a monthly basis.
Monthly HP repayments will contain both an interest and a capital repayment element. The capital element is not an allowable deduction. The interest is a deductible expense.
CAA 2001, s 67
Costs incurred in leasing or hiring an asset to be used in the trade will be allowable.
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