In the current economic climate, businesses need to stay switched on to managing their cash flow and IT infrastructure even more so than usual. Managing cash flow, yet still keeping up to speed with technology and the competition can be an ongoing and expensive battle.
So how can you ensure your IT infrastructure is up to speed, all whilst making your spend work harder for your business in a low risk, tax efficient way?
The answer is to adopt a rental strategy. Renting your IT equipment offers significant tax savings, little upfront investment all whilst benefiting from the latest hardware, software packages and professional service back-up.
For a little over £200 a month (ex VAT), small to medium-sized businesses can keep fully abreast of IT innovation and services by using a flexible leasing plan. Rather than purchasing IT you can achieve tax savings of up to £1,500 over three years.
Due to rentals being classed as a revenue expense they provide significant tax benefits to most organisations while freeing valuable working capital for running the business, rather than paying for rapidly depreciating assets. Further IT upgrades are also possible on the same fixed cost basis by extending the term of the rental agreement.
Even more so than larger corporations, SME businesses need the ability to remain flexible, to upgrade and to keep their machines in maintenance and up to date. A small architecture practise that has no access to certain types of equipment will not be able to take on more challenging jobs. Similarly a graphic designer that doesn’t have the equipment to support the latest software will find themselves dramatically less attractive against the competition.
Benefits to leasing your IT equipment:
• Get the equipment you need now regardless of budget restrictions.
• Keep up to date with the latest technology ensuring your business remains up to speed with the market
• Reinvest upfront technology payments for more profitable use elsewhere in your business.
• Tax efficient - all lease agreements are 100% tax allowable
• Spread the cost over the life of the equipment
• Control your budget - payments are fixed allowing you to plan ahead with no unpleasant surprises on your cash flow.
Jonathan Edwards
Last Updated: October 27, 2009