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I'm thinking of buying a piece of equipment for work. Am self employed and just been looking at financing it.
If i buy it outright i get tax relief on the total cost of the item.
If i'm financing it do i get tax relief on the monthly repayments (including the finance interest charges) instead of the total cost?
thanks
Regardless of buying it outright or financed you would claim AIA capital allowances in the year of purchase. If financed you would account for the interest part if the payment on the P&L reducing your profit (and tax) the capital part of the repayment would go against the balance sheet liability (loan).
If you leased (non interest bearing) the asset the payments would go against your P&L.