Clean It Up
UK Floor Cleaning Forum => Carpet Cleaning Forum => Topic started by: daysdeepclean on February 06, 2009, 09:04:21 am
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I'm itching to get into the world of TM! Am I better of waiting and buying or is leasing a good option?
Colin :)Day
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colin , for tax and to spread payments ,leasing is good but in to days climate, u can get very cheap loans , get ur self agood bussiness plan and ur bank will give u a loan ,the thing about leasing is u pay back double what the origanal cost of the machinery , and takes about say 5-6years and if u want to trade it in say in 3yrs, u wood still have to pay the whole balance of the lease , i once bought a roto- vac , and 4 yrs later , after finaly paying it of , i worked out i could have bought two roto vacs , accountants , sales people, aways weight up the tax benefits, but it ur hard earned, cash thats paying all the extra payments , get a loan,
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Talking to my accountant on Monday, he tells me that capital equipment purchases are now 100% tax deductable in my new financial year onwards. If you have a loan for the purchase, the interest is also 100% tax deductable, so there doesn't appear to be a tax advantage in leasing at present.
For vehicles, it remains the same. 40% year one, then 25%.
My own view on leasing is that it is a good option for a company as there are significant cash flow advantages and employees. For myself as an owner/operator, if I had a lease and was injured, taken ill or lost my driving license, it may be difficult to get out of the lease. If I was purchasing, I always have the option to sell the item(s) and so relieve the pressure. I have been in this unfortunate position in the past and was so glad that I didn't lease.
Safe and happy cleaning :)
Ken
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Good advice Ken,
Leasing always looks tempting from the outset but in this current climate your advice will pay dividends if anyone goes tits up. Another thing to think about is the VAT on the monthly payments if your not VAT registered it can work out dearer than finance on the over all figures.
Dave
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Thank you very much for the input gentlemen, looks like I'll have to crack on using my portable until I can afford a TM set up, not too sure about a loan from the bank ??? ??? ???
It's better to just own something outright, so I'd better start stuffing my cash under the matress!
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100% tax deductible in first year the reason I decided to go the bank loan route on TM, being vat registered another big advantage on big purchases.
Mark
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Mark,
Has the HM TM prices gone up since you got yours? What with exchange rates etc.
On the other hand there seem to be some 2nd hand TM on the market that are going begging and hardly run in yet.
Are these not immense value at the moment.
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Yes Mike gone up allot got in just in time, ;) Bargains out there Mike.
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Your timing is impeccable Mark. :)
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The debate assumes that you will get an unsecured loan. If you can only obtain a secured loan then that should make leasing a far more attractive proposition as the lender has security in the asset being bought.
Leasing can also be more tailored to cash flow with for example lower monthly repayments but with a balloon repayment at the end.
End of the day there is no right or wrong answer and the best option will take into account all these answers and your own circumstances and preferences and attitude to different types of risk.
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Your timing is impeccable Mark. :)
Mrs doesn't think so ;D
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Mark
You are in a good position for when things pick up. The Mrs might not appreciate that now, but she will.
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Collin
Have you had a go with a t mount yet ???
There are some good used ones on the market as mike says at the mo :)
Its good to have a go at a few and see which one will suit your workload :)
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And to complicate the decision making it all depends on if you are (1)not vat registered (2) full vat registered (3) flat rate vat registered.
All things concidered on a Scorpian I have on order it was better for us to buy on a credit card (there's security in doing that) then pay it off quickish.
We're on the vat flat rate scheme.
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Niel
Whats the vat flat rate scheme ???
Cheers
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Turnover between £66k and no more than £150k net (or close to that)
You charge out to customer at current rate presently 15% but you pay the vat man at 9.5% (for cleaning services)
But you can't claim back the everyday expenses of vat like on fuel.
There are other elements to it also but I can't list them all.
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Niel
Cheers was not too sure ::)Your vat reg then ::)
Whens your new set up coming ???
Had a go with one monday and must say its a good portie :)
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Clinton,
I haven't had the pleasure yet, I'm hoping to get a go at the NEC in March.
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Colin
Good idea and even better if you can get someone who has one near you and have a go on site :)
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colin
you live in cornwall, its a no brainer what van mount you get imo.
derek
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Your vat reg then
A necessary evil from a few years back. We had 2 different businesses which own their own were below vat threshold, but the accountant told us we couldn't do that anymore. So by creating 'one' business we had to vat register.
Whens your new set up coming ???
Waiting for a reply back from Nick on that
Had a go with one monday and must say its a good portie
I haven't actually used one. I'm buying purely on the say so of some known experts of this and various other forums.
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neil
i'd get a new accountant, sounds like he's told you that so he can charge you more, i darn't even think about my accountant for fear of him charging me.
derek
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neil
i'd get a new accountant, sounds like he's told you that so he can charge you more, i darn't even think about my accountant for fear of him charging me.
derek
He was right. We had Willclean Window Cleaning run by my wife, and Willclean Carpet Cleaning run by me, both from the same address.
Therefore the Inland Revenue 'could' if they wished take the decision that they were one and the same (which I can understand) and as such they could have worked the figures back over the years and back dated the vat. That I din't need :o
Therefore we created a partnership of Willclean Cleaning Services.
It has it's benefits when getting commercial work as it helps with their accounting.
BTW just got an e-mail to say my new machine left the USA last night by air fraight ;D
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neil.
don't wanna argue about it but your accountant is saying that a husband can't have a seperate business from his wife so long as they live together, if your wife was a mobile hairdresser would that be ok, then so is window cleaning, cleaning hair, cleaning windows,your accountant wants a slap. ;D
but
maybe he's right. who knows.
anyway too late now, once your in the dreaded VAT, its an absolute nightmare convincing them when you need to get out of it. they might as well move in with you.
derek
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colin
you live in cornwall, its a no brainer what van mount you get imo.
derek
Darn tootin' ;)
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Niel
The scorpion is a top machine mate so you wont be dis :)
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Neil
It was some years ago and rules may have chamged, or not,but my accountant said I could have a business, the wife could have a business and we could have a joint (partnership) business.
For a time I had a business and we had a partnership. Both were domestic cleaning but with clearly defined geographical areas. He was happy with this.
Re the Scorpion.
You wont be disappointed, a very efficient machine.
Nick provides a very good service and always there to help, and he is a hands on carpet cleaner himself using the machine and cleaning fluids he sells.
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Neil what machine have you ordered from teh states? was it easy enough and what carriage and import duty will you pay?
Shaun
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ok which one of us has been drinking ;D
it's from Solutions which they import from USA
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Niel
Might not be the drink ;)
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Don't drink, probably not read the thread properly, I'm still seething over a bounced cheque.
Shaun
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Thats the trouble when you get a cheque like this and if you dont sort it it gets to you mate ::)
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Colin,
Check and see if HM do leasing, I know that Altec at Royston do, but of course thats a long way to go for repairs etc, as Cornwall is to us up here in the south.
You will have to have an impeccable credit rating these days to get any form of credit.
Murky
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I'm having a test drive with the Boxxer 318 this week.... I really need my work load to at least double before I would apply for a loan and I would be very sceptical about leasing one....
We'll see!!!
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Colin
Have you thought about remortgaging your house to get the finance?Don't tell them it's for business purposes though .At least that way you could then get your TM.
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We've just bought the house over a month ago and I know the wife wouldn't be comfortable with the idea.... But I'm seriously considering a business bank loan!
I'm not in too much of a hurry really, but certainly I want to be running a TM with the next 18-24 months!!!
I'll run the idea past the wife though just to get that look on her face..... Priceless!
Thanks for the idea Dave!!!
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Just wandering why you feel so compelled to get a truckmount?
Cheers Goron
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When I got my TM I took out a personall loan from the bank which the company pays back, to get a buisnes loan was a nightmare. I can also recomend going down the second hand rout as it will save you a fortune. A three year old TM will half the original price. Mine will be mine in April all brought and paid for. :)
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Just wandering why you feel so compelled to get a truckmount?
Cheers Goron
Easily influenced perhaps ;D ;D ;D
You use one Goron don't you? Why did you go for a TM? I do a caravan site and it's a pain with a porty!!!!
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Colin
I wouldnt rush into t mount mate ???
I am to thinking of upgrading ???
I did a job the other day and quoted a few weeks ago and got the job ahead of a t mount as the t mount could not get access.
Most of my commercial work is not an option for a t mount for security and access so thats putting me off ::)
Must say do like the prowler that dave p has and joes t mount.
Some work will be a pain to do collin and hassle ???
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Colin,
I bought my truckmount when i started purely because i knew nothing about carpet cleaning machines and what their specs. meant, so i new if i got a truckmount even a crap one it is still going to be a capable machine.
But, they can be a right pain in the rear... Oh what a joy it would be to just have a small van that actually fits down our lanes here in cornwall and to be able to just carry a small tool kit and a spare vac and pump on the van not having the high fuel consumption of a big van and the added fuel costs of the tm and having to fill up with water on the cold mornings and carry it around all day on the big van.
Cheers Goron
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Goron
I've just got my back up "Exel" up and running again, wanna swap ;D ;D ;D
I see your point, being based at Helston I can appreciate what you're up against with the back roads, especially on the Lizard....
I will certainly consider your invaluable input Goron, I never thought of the possible problems I may endure...
I would probably have to run 2 units, the porty and the TM which would obviously mean more expense...
Thanks again. Colin...
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The roads get narrower, neigh impassable the closer you get to Goron's patch apparently. ;D
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Is it like that old 70s horror film where you leave but every road leads back to the same place :o
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Goron once you've lugged a porty round for a few years Goron a TM seems so easy, in most cases, but mines new and not had any breakdowns yet. ::)
I think the other sides always greener.
Mark
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Mark
Least your not far from the dealers are you ???
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Clinton HM have an agent in Oxford about an hour and a bit from me or Alltec service any TMs.
You still IMO need a good porty or you will loose money.
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Mark
Your luck then with two not far from you.
Am sure you will be ok and as you said you have got your 3 vac portie.