What are the advantages of renting equipment from a financial viewpoint?
There are several advantages of leasing or renting equipment:
Firstly, and most obviously… if you only require something for a short amount of time, then renting is significantly cheaper than buying. Most people are aware that you can hire a car for a trip, or hire a venue for a special occasion. The logic is simple: you don’t want to have a large capital expenditure to buy something and have the costs of ownership, if you’re not going to regularly use it.
So if you have an annual event, or are trialling something new and thus regular, repeat use is unlikely, then hiring any expensive items for a short period makes sense. From one tablet or a laptop for a visiting colleague, to a few devices for a twice-yearly training course, to hundreds of assets for a 3 day annual conference, please ask us for a quote and see how much renting could save you.
When renting you also get the latest, well-maintained, updated equipment, and if required – installation/de-rig services too. So you aren’t dusting off old technology, or having to setup unfamiliar equipment yourselves.
- If you are looking for longer-term use then hiring, renting, leasing can also be useful as you don’t have to pay the full cost of the asset up front, so you don’t use up your cash or have to borrow money.
- When renting from a technology specialist you get the latest, higher standard of equipment, which might be too expensive for you to buy outright. As a technology specialist business, Hire Intelligence buy technology effectively and have good product knowledge, and good relationships with suppliers, thus enabling us to secure a selection of strong, reliable brands and models.
- The agreed monthly costs of a longer-term rental allow for easy forecasting of cashflow and budgeting.
- You can spread the cost over a longer period of time and match payments and specifications to your income. You can also agree a rolling rental agreement, so that if your circumstances change, you can add or remove assets from the agreement to suit your needs, and your financial position.
- When renting and NOT aiming to own the assets at the end of the rental period, a business can usually deduct the full cost of lease rentals from taxable income.
- You also get ongoing support for the duration of the rental agreement, as a rental company Hire Intelligence carries the risks if equipment breaks down. Generally we replace with a like-for-like asset as fast as possible.
- If you need (or want) to upgrade or alter the equipment for some similar hardware, we can agree a small adjustment to regular rental payments. So to get the new (or alternative equipment), you don’t need to invest a lump of cash.
The cost of renting or leasing an asset is deductible as a business expense so this can reduce your overall tax bill.
If you agree a straightforward rental deal, then Hire Intelligence will remain the owner of the technology hardware being rented, and as you will not become the owner of the asset at the end of the lease or hire purchase contract, this is a “supply of services” for VAT purposes. So VAT will be payable periodically and not full VAT value at the start of the rental contract when you receive the assets.