flexi rent

[Jess Peletier]

Hi all,

I went to buy a laptop yesterday through the business and was prepared to pay cash. I've always thought flexi rent was some what similar to selling your children in terms of financial evil but the sales guy was telling me is much better from a tax perspective.

Now I'm fairly certain that he's not licensed to give tax advice so I ignored him but thought I'd ask here instead.

Assuming $1k laptop for Simplicity sake, is it better to flexi rent or pay cash and write it off straight away? Let's say flexi rent was for a year.

 

[moyjos]

It used to be "better" to Flexi rent because the amount was deductible immediately rather than having to depreciate the computer. (Although a $1000 laptop is immediately deductible anyway). Now with this years $20k ceiling, it won't make any difference tax wise.

If you can afford to pay cash for it, just buy it . Buying on interest free is another option. Our accountant has advised this route for a couple of business purchases, because , while we had the cash to pay for it, by keeping the cash in the bank earning x% and paying off the said items at 0%, we were ahead by those few $$. All to do with making every dollar work HARD

Of course, check with your accountant first.

 

[Scott No Mates]

Taking the government incentives off the table, why would you consider paying the equivalent of 18-25% interest for a term of 2 years or longer? I only keep my laptop for 2 years so why lease one for longer?

 

[Jess Peletier]

Now with this years $20k ceiling, it won't make any difference tax wise.

That's what I thought, but the sales guy said I was wrong. (He lost the sale in that moment)

why would you consider paying the equivalent of 18-25% interest for a term of 2 years or longer

I never would. I would never consider buying stuff like that on credit. But I haven't really looked into it before from a taxation perspective though, so thought I'd try and understand it better to see if I could learn a new trick.

I didn't trust the sales guy to give me proper advice or comparisons.

 

[DaveM]

Flexi rent... meh. High interest, good I guess for businesses with poor cash flow who need a small purchase. For anything 4k or more total invoice value, there are much better IT equipment finance deals

 

[Rolf Latham]

That's what I thought, but the sales guy said I was wrong. (He lost the sale in that moment)

neva tell a woman she is wrong ..........................


ta
rolf

 

[lazibones]

Taking the government incentives off the table, why would you consider paying the equivalent of 18-25% interest for a term of 2 years or longer? I only keep my laptop for 2 years so why lease one for longer?

Well why would you buy it if you only keep it for 2 years? If you rent you can upgrade when you want. If you decide you want to keep it longer than 2 years you can buy it. My accountant told me tax wise it makes no difference but it may be better to lease and preserve your capital or invest it elsewhere