If you are beginning in the catering business, you may wonder if it is better to hire catering equipment or buy it. For example, should you buy second-hand equipment or should it be new? If you are new to the trade, it is often better to hire your equipment as you can take a tax deduction on it. This means that you can take a deduction from your business income and reduce your tax liability. This type of financial approach is essential for new caterers whose cash flow is stretched or whose profits are marginal.
Depreciation Is Not Tax Deductible
If you buy the equipment, the expenses will hit the profit and loss account as depreciation, which is not tax deductible. Plus, tax relief on capitalised assets is founded on capital allowances that are set by the government per annum. Capital allowances are finite. Therefore, a risk exists that they can be consumed by larger asset buys that are needed for your business.
Increase the Profit Potential for Your Catering Business
Besides the tax and financial considerations, an Essex catering equipment hire is just more simple. The lower fixed cost contrasted with your catering income ensures that it will remain the same through the rental term. That makes it easy for you to create a basic account and forecast future periods with cost certainty. If you are just beginning in the catering trade, you know about the pressures of developing a compelling order, ordering your stock, and keeping track of your advertising costs.
That is why hiring your catering equipment solves any problems with lump sum equipment payments. Using this approach can positively influence the amount of money you make. Hiring your catering equipment helps you realise savings in maintenance administration, parts, labour, and materials, all of which are included in the total cost of a hire contract.