When you decide its time to get new computer hardware with blackbox-solutions.co.uk, you have a choice between buying outright, hire purchase or leasing. The route you follow will depend on your business needs, your budget and the level of advice and support you need. When choosing hardware, make sure that any new or replacement components are compatible with your existing computer equipment. Look carefully at the overall costs, including if it might be cheaper to install a new system rather than upgrade existing components.
Buying computer hardware outright
Advantages of buying equipment outright with blackbox-solutions.co.uk include:
- For small businesses, being able to deduct a percentage of the value of their IT investments from their taxable income. This includes hardware, software and mobile phones. Read more aboutcapital allowances.
- Not being tied into medium or long-term agreements which may be difficult to end if your needs or circumstances change.
Disadvantages of buying outright include having to:
- Pay the full cost up front. This may cause cashflow pressures as you can’t easily spread the cost to coincide with money coming into the business.
- Replace equipment regularly. Computer equipment depreciates quite quickly and may be obsolete after a few years, requiring a further investment.
Advantages of hire purchase or leasing of IT equipment include:
- Financial flexibility – you can spread the cost of your equipment over a period of time so its impact on your cashflow is less severe.
- Tax benefits – as with purchasing, leasing can also offer tax benefits. Businesses can usually deduct the full cost of lease rentals from taxable income. Consult your accountant for specialist advice in this area. Find out how tochoose and work with an accountant.
- An integrated maintenance contract and replacement equipment (in the event of total failure), often as part of the deal.
- The possibility of a periodic upgrade or replacement with new equipment as part of the package, keeping your office technology up to date.
Disadvantages of hire purchase or leasing include the following:
- The equipment’s overall cost may be greater than if you’d purchased it outright.
- There can also be more administration involved.
- When leasing, your business doesn’t actually own the equipment. It remains the property of the supplier.
- When using hire purchase, your business will own the equipment at the end of the contract, by which time it may be obsolete.
When deciding if you should buy or lease your hardware equipment, it’s important to also consider your needs around hardware installation, maintenance and support.