Should you buy or lease a copier?
A new printer-copier is an outlay you could do without, so is it worth looking at lease options instead? What do you need to watch out for, and can you secure any savings?
Leasing or renting a machine like a printer-copier means you don’t have the stress of maintenance, repair costs, etc. You also get the latest models. Managing cash flow is a little easier too, as it’s a small monthly payment versus a big outlay upfront. There are two general options.
Lease. This tends to be on a fixed-term contract, lasting anything from twelve to 60 months or more. You’ll need to check, but it often comes with full service and maintenance costs included. In some cases, the toners are part of the monthly or quarterly fee too. The payments can be deducted from taxable profits.
Rent. This is better as a short-term option, e.g. if you have a big job that will require lots of printing or copying. The contracts are easy to cancel and flexible, but this means monthly fees can be higher than leasing.
The most important questions you need to ask are: what will you be using the printer-copier for; how many pages is the machine likely to get through each month; what level of quality do you need; what are the costs of buying v leasing over five years? Using the answers to these questions it’s quite easy for you to determine whether leasing or buying is the best option for you by drawing up a simple table. Don’t forget to check out second-hand options too.
Overdrawn director’s loan account
If your DLA is in the red, the tax (known as the s.455 charge) payable is equal to 32.5% of the amount you owe at the end of its financial year. However, it’s a temporary tax charge that HMRC repays nine months after the end of the accounting period in which it’s repaid.
Usually declaring a dividend and crediting it to your director’s loan account is the most tax-efficient option, but the company must have profits to cover it.
Time to review your child benefit claim
Coronavirus has caused incomes to fall for many people. This means if you haven’t claimed, or have stopped claiming, child benefit because of the high income child benefit charge (HICBC) it might now be worthwhile claiming or reinstating your claim. You can restart child benefit at any time. Payment usually starts the Monday after the application is received but for new claims it can take up to twelve weeks. You can backdate a claim up to three months.
When working out your income remember that coronavirus support payments are taxable and so count towards the £50,000 limit.