Besides increased employee satisfaction, there are countless benefits to providing high-quality, technical and ergonomic set-ups to your teams: less risk of musculoskeletal injury, one of the most common causes of both short- and long-term absences in the UK; increased productivity; decreased error rate and so on.

When it comes to financing this equipment, there are clear financial, health and safety (H&S), and operational advantages to renting equipment, which is then owned by the lessor, over purchasing the equipment and either your business retaining ownership or gifting it to your employees.

Below, I run through the key considerations for both models.

What are the financial considerations?

OpEx vs CapEx

Office equipment that's purchased is a capital expense. That means you are required to track it on your balance sheet and insure it. Rental of home office equipment, on the other hand, is an operating expense. So, there's no need to track it on your balance sheet.

Tax implications

If you gift equipment to remote workers – either upon purchase, or when they leave your organisation – you may need to report it on the employees' payroll, and tax return that a gift of a certain value was given to the employee. Employees then may face income tax and national insurance charges on the value of the equipment.

In a rental situation, the lessor owns the equipment during, and at the end of, the contract. That means no payroll reporting duties, and no tax risk for team members.

The bottom line: Renting involves less financial admin and no tax risk for team members.

What are the health and safety considerations?

Upkeep of equipment

If you purchase and retain ownership of the equipment you provide your teams with, you are responsible for the upkeep. The exact nature of your responsibility will vary by jurisdiction. For example, in the UK, the Provision and Use of Work Equipment Regulations (PUWER) require employers to ensure equipment is ‘maintained in an efficient state, in efficient order and in good repair’.

You should read up on local requirements to ensure you are meeting your H&S compliance duties surrounding equipment maintenance.

If you rent equipment, the lessor owns the equipment, and therefore takes on this responsibility.

Insurance liability

If an employee sustains an injury during, or due to, incorrect assembly of equipment you have purchased, you may be liable for insurance as a result of your duty of care to provide a safe working environment for remote workers. For this reason, you may wish to take out insurance to cover your liability.

In a rental situation, the lessor takes on this liability.

The bottom line: Renting spares you H&S and insurance liability risk.

What are the operational considerations?

Classification of contractors

Contractors are expected to use their own tools for the job. In most jurisdictions, a contractor that uses company-owned equipment would be deemed an employee. And so, purchasing equipment for a contractor runs the risk of misclassification.

If you rent equipment, the lessor owns the equipment. As the contractor is not using company-owned equipment, and the rental can be treated as a business expense, the risk of misclassification is significantly lower.

The bottom line: Renting reduces the risk of misclassification.

The advantages of renting vs purchasing summarised

• You don’t need to track a rental on your balance sheet
• You do not need to report a rented item on an employee’s payroll
• An employee will not be taxed on a rented item
• You do not have to look after rented equipment (e.g., repair it)
• You do not have to insure rented equipment
• You run less risk of a contractor being misclassified as an employee if you rent