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January/February EHN issue
“Like an Aladdin’s Cave”
Your next steps
Hireman heads east
“Our DNA is in hire”
The Key to success
Tackle tool costs
Driven by hirers
Lombardini lines up
Tool Hire Top Ten 2013
Hire outperforms UK economy
Profile: Artisan Hire Centres
“In many ways, the independent’s time is now”
Executive Hire Show 2013 Preview
Hire outperforms UK economy
Your attendance is essential
Executive Hire News › Archives › January/February 2013 › Executive Report : Executive news
Executive Report : Executive news
Hire! Freeman on track
Telford-based Hire! Freeman, which won the 2012 Executive Hire Show Passionate Hirer Award in the Small to Medium Hire Centre category, has expanded its powered access fleet after investing in new machines from Access Platform Sales (APS). Its latest purchases include a new Hinowa Goldlift 14.70 tracked spider lift, and three Niftylift units, comprising an HR12 self-propelled articulating boom and two 170 trailer-mounted models.
The Hinowa Goldlift 14.70 spider lift provides a maximum working height of 14m and outreach of 7m. It is less than 2m tall and just 0.78m wide when stowed. It also has expanding tracks for stability. Hire! Freeman’s new machine went virtually straight out on hire for work at nearby Wilderhope Manor in Shropshire, a Grade I listed manor house, which has undergone a £500,000 restoration.
MD John Freeman said: “The Hinowa is beautifully made, and very well thought out and assembled. The way the pipes are routed,
and exposed areas protected, is particularly impressive for a small machine. APS offered us a really competitive trade-in price on our old models and we trust them to provide a really high level of after-sales support for both the Hinowa and Nifty products. We have been let down in the past by other suppliers, but the after-sales service from APS is always first class.”
Huntingdon-based APS, which will be exhibiting at the Executive Hire Show, is the exclusive UK distributor for Hinowa tracked products,
as well as a dealer for Niftylift. It has 23 service engineers offering nationwide coverage.
HSC’s Total commitment
The Hire Supply Company (HSC) lived up to its reputation for rapid service when it responded to an urgent order over the Christmas holiday period. “I took a call on the evening of Saturday, 22 December from Derby-based Total Hire & Sales, which needed 50 heaters for one of its key account customers whose boiler system had failed,” MD Gary McWilliam told EHN. “They needed to keep their employees who were working during Christmas warm.
“Over a couple of phones calls it was agreed that we would open up on Sunday 23rd and that Total would collect the heaters from our Long Eaton head office. By Sunday morning the order had increased to 100 heaters, which just about filled Total Hire’s truck, and the units were ready to go just after 9am. The customer was really pleased with the response from Total, whose General Manager, Andy Hickingbottom, expressed his gratitude that we were, in turn, able to react so quickly.”
Volvo rollers meet Fork Rent test
Ipswich-based Fork Rent has bought ten Volvo DD25w tandem rollers following a successful evaluation of the 2.5 tonne machine. “The initial trials we undertook proved very successful,” said Chairman Guy Nicholls. “We also liked the build quality, modern design and, not least, the safety features that are built in as standard and which are an important selling point for customers like local authorities and highways agencies.”
The double drum compactor weighs 2.6 tonnes and has a drum width of 1.2m. Other characteristics that impressed Fork Rent about the DD25w, which will be among the machines that Volvo will display at the forthcoming Executive Hire Show, were the layout of the engine compartment and the ease of maintenance provided by accessible filters and remote drain lines for engine and hydraulic oil.
Fork Rent offers national coverage via its depots located in Ipswich and Hullavington, and plans to open in at least one northern location by the end of March.
TENFOLD INCREASE IN ANNUAL INVESTMENT ALLOWANCE
EHN invites Nigel Greenaway of JCB Finance Ltd to comment.
One of the surprises in the recent Autumn Statement was a tenfold increase in the Annual Investment Allowance (AIA) from £25,000 to £250,000 from 1 January this year. There was also an additional cut in Corporation Tax, with a 2% reduction from April 2014 instead of the previously planned 1% cut, resulting in a 21% rate come 2014.
What are the implications for hirers considering investing in eligible plant and equipment at next month’s Executive Hire Show? For incorporated businesses, the drop in Corporation Tax actually means that greater tax savings will be made by acting now when the rates are that their highest. However, an even greater impact on the timing and size of tax relief can be achieved by utilising the enhanced AIA.
The AIA is designed to encourage investment on new or used equipment against taxable profits in the year in which the qualifying expenditure is made. The same rules apply to all hirers purchasing kit from 1 January this year and before 1 January 2015. The first £250,000 of expenditure is 100% allowable against tax, with any excess attracting the 18% annual Writing Down Allowance in the first year. This all sounds very good but what does it mean?
Imagine a hire business trading as a partnership, with its financial year matching the tax year. It has successfully expanded its fleet to include mini excavators. However, the partnership is rapidly approaching the end of its tax year and the accountant fears that a big income tax bill is looming. Even after claiming all available business expenses, a profit of £250,000 remains, which would attract the 40% income tax rate.
The accountant explains that, if the partnership invests that £250,000 profit in replacement plant, from the 6 April 2013 onwards, then the full £250,000 AIA will apply. Paying a 10% deposit (£25,000) and borrowing £225,000 over three years on a hire purchase agreement equates to a £100,000 outlay in the first year, followed by £75,000, net of interest charges, in each of the subsequent years.
The £100,000 expenditure in the first year equals the £100,000 tax bill saved, so HM Revenue & Customs has effectively paid for the partnership’s deposit and its first year’s HP payments. Not only that, but the partnership has managed its cash flow in an exemplary fashion – claiming the maximum £250,000 AIA, but with an outlay of only £100,000 in the same tax year. Paying £250,000 in cash on Day One would only net the same tax benefit.
However, be warned because the above scenario is relatively simple to interpret. Different financial years that straddle the tax year and/or the 1st January 2013 will result in very complicated calculations that will result in a lesser AIA being granted in that financial year. In the example above, if the partnership, having not purchased any plant in that financial year, decided to purchase plant on 1 January this year then it is conceivable that only 3/12 of the £250,000 could be claimed i.e. £62,500. After the new financial/tax year starts in 2013 another £250,000 will become available. The chart below illustrates this by showing four different financial year end companies and how vital it is to spend the right amount within the right periods in order to maximise the tax benefits.
Other factors being equal, if your business is contemplating purchasing plant at next month’s Show, there are strong tax-based and cash flow arguments to carefully plan plant purchases before 1 January 2015, so that you can maximise on the available benefits.
• JCB Finance points out that it is not a tax or financial advisor. It says you should always seek advice from your accountant or finance director, because each business is different. Hirers should not make investment decisions purely on a tax basis - there should be a compelling business case for the investment.
PASSIONATE HIRER AWARD SHORTLIST ANNOUNCED
After an initial series of checks, brief ‘mystery shopper’ visits or phone calls in December, together with more detailed EHN articles during 2012, we have shortlisted the following companies in our 2013 Executive Hire Show Passionate Hirer Awards - Most Impressive New Outlet.
The Awards process now is for our Judging Panel to visit each of these new outlets and assess them in more detail. The Passionate Hirer Awards will be presented on Wednesday 6 February at the start of the evening Party at the Executive Hire Show.
The eight nominated depots are:
• Alide Hire, Bristol depot
• Artisan Hire, Staverton depot (see also "In many ways, the independent's time is now")
• Nixon Hire, Dundee depot
• Smiths Equipment. Warrington depot
• The Hireman, Leytonstone depot (see also Hireman heads east)
• Total Hire & Sales, Central Derby depot
• WHC Hire, Tewkesbury depot
• Your Equipment Solutions, Grangemouth depot
Plantworx continues to grow
The organisers of the Plantworx construction equipment exhibition report that the event is now more than 80% sold, with over 170 exhibitors having booked space. The inaugural Show takes place at Stoneleigh Park, Warwickshire, on 14-16 May. The Dig Zone, in which exhibitors will be able to demonstrate equipment in a working environment, has only 2% of available digging space remaining.
The latest exhibitors to have signed up include AJC Trailers, Marubeni Komatsu, Oswald Record and Topcon GB. Amongst new equipment on display will be the HT1000 tracked dumper, pictured, from Slanetrac, the RVD-4 pipe lifting machine from Probst Handling Equipment,
an automatic implement recognition system from Merlo, and an excavator-mounted tree cutter from Ulrich Attachments.
Entry to the exhibition is free, and for more details visit www.plantworx.co.uk
Hire Network trio confirmed
Will Hire of Stourbridge and the Hackney depot of Toga Plant Hire have been announced as the two other shortlisted finalists for the 2013 Hire Network Award, which recognises excellent service at individual branch level. They join the Silvertown depot of Generation Access, which had been nominated earlier.
“We have dealt with Will Hire for many years and the company has never let us down,” Hire Network MD Barry Dean told EHN. “Similarly, Toga delivers consistently high standards of service in providing a wide range of tools and equipment.” The Award winner will be announced at the Executive Hire Show.
Lightning response from Parker
To meet local demand, Parker Tool Hire of Nottingham has had adapters specially made for it to enable lightning rod contractors to use rotary hammers for installing earthing rods into the ground.
“We could not find a suitable adapter on the market that was compact enough,” Partner Stuart Parker told EHN. “We have had them made to our own design by a local supplier, incorporating a short stem so that the user isn’t over-reaching when placing the hammer on top.”
The adapters are made from hardened steel and have an SDS Max fitting with a specially designed knuckle to protect the thread on the rods. Stuart Parker says that the response from customers has already exceeded expectations, and that his company is offering the adapters to other hirers as well.