Buying computer hardware outrightAdvantages of buying equipment outright 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. See our guides on capital allowances: the basics and first-year allowances.
Disadvantages of buying outright include having to:pay the full cost up front this may cause cash-flow 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 in value and may be obsolete after a few years, requiring a further outlay of money .
Leasing computer hardwareAdvantages 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 cash flow 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. An integrated maintenance contract and replacement equipment (in the event of total failure), often as part of the deal, giving you peace of mind. The possibility of a periodic upgrade or replacement with new equipment as part of the package, keeping your office technology up-to-date.
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