gear on finance.. has it helped you??

[Matthew Storrs]

Also, I think it depends on what kind of business you run, if you offer several services and subsequently have several machines then its unlikely they are all going to be used all the time, so in this case I'd prefer used owned kit sitting if the yard where its not costing me. If there is a case of a business using a machine everyday, like a wood chipper if your a tree surgeon then you'd want the newest most reliable kit available.

[josharb87]

Talking of finance offsetting tax, i thought if you brought something outright, vehicle, machine etc, you could split the cost of the item over its projected working life, e.g 4 years before replacement, offsetting the tax eitherway? making the finance good for tax argument not really valid?

Be intrested to know if i got this is right or wrong!

[Jonny69]

I think the final sentence sums up finance. It's ok saying money is cheap but unless you have it on a fixed interest rate then you might run into trouble down the line. If you can afford it then it is a must.

 

 

Sent from Outerspace.

 

I have heard about variable rate finance, but this was a LOOOOOOOONG time ago and I don't think anyone offers it any more (or if it is even legal to sell)

[Le Sanglier]

If you're serious about your work then finance is almost a must, unless you have been given a large inheritance!

 

I try and finance half of the cost of new kit, that way if i need to shift it quickly I'll never be in negative equity as it were.

 

I currently have finance on my new land rover, and on my valtra, I have used it in the past to buy chippers and the alpine tractor.

 

If you wait to save up for all your kit you are loosing the advantage of having the kit straight away. The new kit should make you more productive and therefore make more money. If it isn't going to make you more money then why buy it?

 

Just make sure you can afford the repayments!

 

Yeah, I wanted to say that about waiting to save up and losing the advantage etc. but When I wrote it I did not seem to make sense.....you're right though:001_smile:

[Jonny69]

Talking of finance offsetting tax, i thought if you brought something outright, vehicle, machine etc, you could split the cost of the item over its projected working life, e.g 4 years before replacement, offsetting the tax eitherway? making the finance good for tax argument not really valid?

Be intrested to know if i got this is right or wrong!

 

You are right, sort of!

 

If you finance, hire purchase (not contract hire, lease hire) you or the finance company receive an invoice for the full invoice price. When you give this to your accountant it makes no difference whether you have financed the item or paid cash.

 

A 20,000 + VAT chipper goes through the same regardless.

 

If you pay VAT on your monthly bills (Contract hire or lease hire) then the invoices go through individually so each month invoices are separate.

 

There might be specific reasons why one is better then the others for you situation.

[Stephen Blair]

You right off as much as it makes sense to do that year.

If it keeps you out a high tax bracket then it's up to the accountant to decide which is best, if you plan on borrowing more money the next year, say for a house, you need your profit as high as possible, to take the hit 1 year and take advantage the next.

There is no simple 1 sentence answer I'm afraid.

[Ian Flatters]

I know a few company's who don't own any of the gear outright, even a van.

 

just seems tempting to think another machine could benefit the business without having to wait until the bank account says yes.

 

looks like I had better get the welder out again

 

I've owned all my gear until this coming week when i take finance out on a new chipper. Although id only needed to of put 10% down as a deposit i decided to put as much as i could for 2 simple reasons 1) reduce the monthly repayments down to a tw125 at 10% deposit 2) i could of only afforded at 150tw 2nd or 3rd hand and my last became problematic in a short time. So im now getting a Greenmech 19-28 which would of been out of my price range for a very longtime.

 

Its really needs and musts but i prefer to not have finance because it can be a real problem if you have too much costs vs a slow down in work.

[gensetsteve]

My understanding is most plant is 100% deductable. But if you are paying 25% tax you are still picking up 75% of the cost on a 10k chipper you will reduce your tax bill by £2500.00 . If you take finance or hp as its often called they ban snatch it back even if you owe as little as £1. If you get a personal load its alot harder for them, Not saying you are going to default on the repayments but if its a personal loan and a tool for your living Bailiffs will have a hard job getting their hands on it. Who knows what the future holds and the mortgage and feed kids comes first.

[doobin]

Also, I think it depends on what kind of business you run, if you offer several services and subsequently have several machines then its unlikely they are all going to be used all the time, so in this case I'd prefer used owned kit sitting if the yard where its not costing me. If there is a case of a business using a machine everyday, like a wood chipper if your a tree surgeon then you'd want the newest most reliable kit available.

 

Spot on. My digger hasn't moved for a month. But it's paid for, not depreciating any more (if anything rising slightly), and when it does next get used it'll make me a hundred for two hours work.

 

Having said that, I bought that digger on finance! Second hand from my mentor however, which is a very different kettle of fish.

[steve@black]

I dont want to derail a thread but it is interesting the way we accept finance and overdrafts ect as a way to ultimately earn more money , so someone should tell the students to stop whining because there loan in no different as a way to a means to earn more money. (thanks rant over)