"Opening or operating a café involves countless financial decisions, with equipment acquisition representing one of the largest capital challenges. Commercial espresso machines, grinders, refrigeration, and other essential equipment easily total £30,000-50,000 for basic setups, whilst premium installations can exceed £100,000. This capital requirement forces difficult choices-purchase outright, draining working capital, finance through loans, increasing debt burdens, or pursue coffee machine rental and equipment leasing arrangements, preserving cash whilst accessing necessary equipment."
"Understanding UK taxation rules around equipment rental fundamentally affects which approach makes financial sense for your specific circumstances. Tax treatment differs significantly between purchasing and renting, with implications for cash flow, allowable deductions, and long-term costs that aren't immediately obvious without digging into HMRC regulations. Here's what café owners need to know about equipment rental taxation to make genuinely informed decisions rather than just following industry conventions or supplier recommendations."
Opening or operating a café involves numerous financial decisions, with equipment acquisition among the largest capital challenges. Commercial espresso machines, grinders, refrigeration and other essential items commonly cost £30,000–50,000 for basic setups and can exceed £100,000 for premium installations. Owners must choose between purchasing, which uses working capital, financing through loans, or rental and leasing to preserve cash. UK tax treatment differs significantly between purchase and rental, affecting cash flow, allowable deductions and long-term costs. Annual Investment Allowance (AIA) currently allows up to £1 million of qualifying capital expenditure to be deducted in the year of purchase. Under AIA, a £40,000 espresso machine can reduce corporation tax liability by £10,000 for a company at 25%.
Read at London Business News | Londonlovesbusiness.com
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