Do not put the tax cart before the business horse
“My mate said that if I buy some computers before the end of December I can get a full tax deduction this year.”
Your mate, possibly a computer salesman or someone who works for a leasing company, may very well be right, but the real questions are:
- does your business need new computers?
- if so, how can you get the best deal?
This question came my way in December and my reaction was that if the client bought the computers in the January sales they would probably get a much better deal for themselves. The tax benefits will still come through in good time.
It also reminded me that it can be daft to make decisions primarily for tax reasons. Putting the tax cart in front of the business horse is the wrong way to run a business.
For sure, when you are making plans give some thought to whether there is a tax consequence of a particular option or whether, having decided to do something, there is a tax-efficient way of doing it. But that’s the right way round.
Business first; tax second.
Keep it simple.