Businesses looking to purchase a range of furniture for their office, shop or venue need to consider the tax and accounting implications. Listing an item for your business as an expense or asset can save you money in the long term and acts as something that belongs to the company rather than an individual.
In this guide, we outline whether office furniture can be listed as a fixed asset under your company’s accounts come the end of the financial year. The following should not be taken as financial advice.
Contents:
Is office furniture a fixed asset?
Yes, office furniture can be classified as a fixed asset.
A fixed asset, or noncurrent asset, can be typically described as a physical item that a company purchases and uses to make products or services and can then sell to generate revenue. In the majority of cases, office furniture and office equipment will be used for over 1 year meaning it will be listed as a fixed asset – useful life.
Listing items such as office desks or chairs as a fixed asset in your company’s accounts, will mean you need to factor in the depreciated value each year so that you can make the most of your tax allowances.
Useful life – how does this impact office furniture?
A frequently used term in accounting is ‘useful life’. In this instance, office furniture must be useful to your business for more than one year for you to classify it as a fixed/non-current asset. Most companies use office furniture for longer than one year, so barring an unforeseen circumstance, your office furniture likely meets this standard.
If you’re looking at the prospect of purchasing an office chair, we’ve created a guide on how often they should be replaced – on the back of this, you can determine whether to list this item as a fixed or current asset.
Summary
Purchasing office furniture outright can be tax-efficient on your balance sheet come the end of the financial year if listed as a fixed, tangible asset. Whilst this can’t be taken as financial advice, listing office equipment such as reception desks, filing cabinets, chairs and more as a fixed asset can benefit you.
At Think Office Furniture we supply businesses across the UK with the highest-quality desks for offices and reception areas. We have a wide range of brand-new office furniture that meets your requirements – choose your shape, colour and finish for the best office desk for your needs.
If you would like to find out more information on how our office desks can help your business, then please do get in touch and we will be more than happy to help.