I've recently come across a handful of client's Hire Agreements from Kennet Leasing. Not sure I've been correctly treating and wondered if anyone else has come across these?
Agreement is called Hire Agreement and is paid by several all equal installments + VAT. I've always believed that VAT = operating lease with payments to P&L and revenue expense for tax.
However, second client now tells me that they'll keep the assets after the final instalment which seems to indicate finance lease - i.e. capital and AIA for tax.
Can anyone help? Is my presumption about VAT wrong? What is the correct accounts and tax treatment? Thanks.