For UK businesses choosing between renting a dedicated GPU on our hosting and buying their own rack hardware, the accounting implications matter. Depreciation schedules, capital allowances, and cashflow differ materially.
Contents
Opex
Monthly hosting is a pure expense. Fully deductible against current-year revenue. No asset to track, no depreciation schedule, no end-of-life equipment to dispose of.
Capex
Purchase your own GPU server, colocate it or run it in your own space. The server is a capital asset, depreciated over its useful life (typically 3-5 years for compute hardware).
Example: £20,000 server depreciated straight-line over 4 years = £5,000/year = ~£417/month of deduction. Higher upfront cash outlay, lower recurring expense.
Tax
UK Annual Investment Allowance (AIA) lets many businesses deduct capital hardware purchases in full in the year of purchase – meaningful for accelerating the tax benefit. Check thresholds for your business size.
Opex has no AIA consideration but is simpler – no schedules, no disposal event to track.
Pick
| Scenario | Opex (rent) | Capex (buy) |
|---|---|---|
| Short horizon (<1 year) | Strongly preferred | Avoid |
| Fast-changing needs | Preferred | Hardware locks you in |
| Cashflow tight | Preferred | Big upfront |
| Predictable 3+ year need | Works | Could make sense with AIA |
| No infrastructure team | Strongly preferred | You need people to run it |
For most small and mid-size businesses, opex via dedicated hosting is the right default. Capex via ownership is a niche path for organisations that already run infrastructure teams.
See capex vs opex UK.
