02 May 12

How To Get Full Photocopier Tax Deductions

How To Get Full Photocopier Tax Deductions

Digital photocopiers, better known as the gentle giants of office life, are quite uncomplicated and docile creatures as long as they function uneventfully. But somewhere along the line, things tend to complicate, machinery breaks more often and eventually becomes obsolete. You then realise it is time to start looking for a new photocopier.

 

If you are hoping prices have gone down since the last purchase, you are in for a serious price shock. A popular solution is to partially, if not completely, absorb the cost at the end of the financial year through tax deductions. In a very straight forward process, your accountant can advice on ways to balance cost distribution of liability versus current assets and still enjoy a healthy cash flow. In recent years leasing has become the preferred method of solving the issue, while also being one of the most profitable options in the long run. The potential to fully deduct the expense maximises the expected return on investment. Perceived as the budget managed alternative to purchasing high cost office equipment, the perfect photocopier lease offers easy budget management for periods between three to five years.

 

Canon imageRUNNER ADVANCE C2020i

Canon imageRUNNER ADVANCE C2020i

Free Delivery

£1840.00 +VAT

Ricoh MPC300 Photocopier

Ricoh MPC300 Photocopier

Free Delivery

£1729.00 +VAT

Sharp MX-2310U

Sharp MX-2310U

Free Delivery

£1995.00 +VAT

Near perfect TAX incentives for leasing

An obvious yet often overlooked advantage of leased machinery is that it does not count towards company assets, therefore not being subject to tax. Moreover, companies can include any service contracts and per-cost arrangements in the total lease cost benefiting from maintenance, repairs and toner supplies. Such costs count towards business expenses and are fully deductible from the corporation tax. It is no secret that most businesses earn revenue over time in a linear fashion, thus distributing expenses the same way makes sense. Given their size, SMEs tend to prioritize cash flow over total cost of ownership. Photocopier leasing alleviates the upfront payment burden of cash purchases, a healthy alternative to overdrafts or bank loans, which impact credit lines and may require additional security.

 

Benefits of use without burden of ownership

In a perfect world business purchases appreciate in time, but office equipment is rarely that efficient. Although photocopiers boast superior versatility, cover print, scan, fax and copy by default, they are no exception and deprecate over time due to heavy use. Manufacturers support any given photocopier model for a limited number of years before discontinuing the product line. Often enough maintenance costs for an old piece of machinery can exceed the price of a new copier.

 

When leasing is the second best option

As a rule of thumb leasing is the best solution for photocopiers over £1000. In turn, such costs cover office needs of more than 700 copies per month. Anything below this threshold and we are looking at less powerful models that may very well be purchased directly without significant financial pressure.

 

Are upgrades possible?

Adjustments can be made over the course of the contract, keeping your company up to date with the latest technology, a clear advantage that becomes invaluable after three or more years of leasing. While businesses are usually contracting during recession, printing needs tend to grow proportionately in times of expansion.  Instead of purchasing a second photocopier, this change can be easily reflected in the upgrade of your existing photocopier lease. Such details are to be discussed with the actual leasing company since T&C vary, but most if not all provide this feature.

 

The fine print

In recent years leasing gained more and more prevalence in the UK to become the most popular choice of equipment financing. Its comprehensive benefits cater both to the cash flow of SMEs as well as the strict financial control required by large organizations. Unparalleled tax efficiency bundles with flexible upgrade paths to favour leasing over traditional upfront payments. Remember that leasing arrangements are done with third party companies, not the actual photocopier reseller. Given the lease time span, a preliminary financial audit is required, not unlike a regular credit check.

 

Should you require assistance, please feel free to call our specialist team on 0800 652 0420 for an ongoing, proven and measureable success story.