Installment purchase vs. business invoice and VAT settlement

One of the benefits of running a business is the ability to include some purchases of fixed assets – but only those strictly related to the running of the business – as tax-deductible expenses. However, can we reduce income tax and VAT in this way in every situation? Find out how a hire purchase for a business works and whether there are any additional restrictions.
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The trend in which stores seem to prefer individual customers, offering them multiple forms of installment sales, has clearly changed in recent years. More and more vendors are courting business customers as much as individual ones. So it’s much more common to see the words “0% installments” next to business offers. Where does this change come from?

Many online stores and marketplaces use third-party financing providers such as PragmaGO. They allow for a three-way arrangement whereby the business customer purchases from a particular store and the financing provider transfers funds to the vendor. The result? Customers can make deferred payments or take advantage of convenient business installments.

Each party benefits from such an arrangement. The financial solution provider earns money by implementing and operating its product. Stores or sales platforms gain a competitive advantage and expand their offerings. In the end, the customer wins by getting another payment method. It allows her to make corporate purchases with maximum flexibility.

Whether you are a businessman or buying as an individual, remember that the possibility of making a purchase on installments exists whenever this form of transaction is agreed upon by the parties involved. After all, buying equipment or merchandise at a major retailer is just one situation. There’s nothing stopping you from spreading out your payment for a service or production materials – especially if you’re doing business with a supplier you know well.

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