Can I claim AIA on equipment bought through hire purchase?
Qualifying equipment bought on hire purchase can be eligible. Once you start using it, relief can generally cover the capital payments under the contract, including future instalments. Interest is excluded from AIA.
These answers provide general information, not advice tailored to your circumstances. Rules can change and exceptions may apply — speak to the CASS team before making a tax, accounting or financial decision.
Check the finance agreement
Hire purchase can allow you to claim capital allowances before you have paid every instalment. For qualifying equipment, HMRC says that when you start using the item you can claim for the capital payments you will make under the agreement, subject to the relevant allowance and conditions. Interest does not form part of the AIA claim and is considered separately as a finance cost. An agreement described as equipment finance is not automatically hire purchase. A lease may have a different treatment. Keep the agreement showing the cash price, interest and payment schedule. CASS can check the arrangement and the timing of your claim.
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