It’s easy to think of machinery, plant and tools as artifacts that only affect industrial and practical businesses. Though construction workers and labourers may have the greatest need for it, there is no business in which such essentials as light fittings and pipework aren’t required. It’s therefore important to stop and think about how much you are spending on the tools, machines and furniture you need to get your job done.
Don’t buy, hire!
Successful business owners realise that they don’t need to own everything under the sun. Buying tools left, right and center may sound like a good way to have an arsenal at your disposal, but consider the storage space they take up and how often you’re likely to use them. Once you factor in the costs of maintaining, repairing and insuring them (particularly in the case of power tools), ownership of a surplus of tools can prove to be an expensive white elephant.
It’s often much more cost effective to hire items as and when you need them. It can be done relatively inexpensively, and means you avoid the initial cost of the tools, as well as the cumulative expenses of keeping them.
Use only when needed
Companies also waste plenty of money by simply leaving appliances running more than they need to. You may not notice the electrical hum of the printer in the corner of the office, but you probably would do if the sound was replaced by the occasional clink of a penny going into a piggy bank to represent the money you’re wasting on electricity.
Similarly, when using tools, don’t immediately reach for the electrical ones. You might be able to do the job just as well with a manual implement.
Consider capital allowances
For the plant and machinery that you must buy, don’t forget that HMRC might be able to help you out.
Legislation CA21000 on HMRC’s website gives a lowdown of the items on which allowances can be claimed, and is very clear about what can be classed as ‘plant’. It covers everything from electrical installations and building alterations, to areas as niche as football ground improvements and agriculture businesses that require animals.
A wise way to ensure that you are getting the best from HMRC for your company, without claiming for anything you shouldn’t be, is to consider outsourcing accounting functions to professionals with a sound knowledge of tax and the legislation that surrounds it.