Back to the office – help is available!

With the rapid progression of the UK’s vaccination programme and relaxing of lockdown restrictions, many businesses could see an increasing number of employees returning to office premises over the next 6 to 9 months.

Safety in the workplace

Phil Bath, Managing Director at Phil Bath Business Services Consultancy Ltd

As employees return to their workplace, their safety is of paramount importance to their employers.

Many companies will be looking to rework their existing furniture, such as creating a minimum of 2m distancing between people in open workstations, meeting spaces, cafés, and breakout areas. They may also look to reduce occupancy by removing desks, tables, and seating, or use alternating desks.

The three stages to consider when reconfiguring spaces are:

• Density: the number of people per sq. ft/m

• Geometry: how the furniture is arranged

• Division: using screens, panels or barriers

These should be used to create spaces that, when implemented with new safety guidelines, allow people to confidently come back into the workplace.

Moving forward, organisations will want to create a diverse range of spaces that are highly adaptable and consider furniture that can be easily moved and surfaces that can be effectively and easily cleaned.

Meetings should take place in open spaces for more than five people, using flexible furniture with movable whiteboards and screens to create boundaries.

Employees and visitors will expect a safe and secure space to work and meet. As a minimum, organisations will need to provide anti-virus desk screens, social distancing signage, hand sanitiser stations and PPE.

Super-deductions

Anthony Davies, Tax Partner at Carpenter Box

The preparation for the return to the workplace will no doubt have a financial impact on many businesses as they upgrade equipment.

From 1 April 2021 until 31 March 2023, there are two new reliefs available to companies that qualify with expenditure on plant and machinery assets:

• A 130% super-deduction capital allowance qualifying plant and machinery

• A 50% first-year allowance (FYA) for special rate assets

This means that companies will be able to save up to 25p of tax for every £1 invested.

The 130% super-deduction is for assets that would normally qualify in the main pool for capital allowances with a writing down allowance (WDA) of 18%. This includes plant, machinery, furniture, etc. This means if a company spends £100,000 on qualifying office equipment, the company can claim a deduction of £130,000 against taxable profits.

The 50% FYA is for assets that normally qualify in the special rate pool with a WDA of 6%. These are integral features such as air-conditioning, lifts and water heating systems.

What is Plant and Machinery?

Despite the industrial term, plant and machinery generally refers to the equipment used for carrying on a business (‘tools of the trade’). While it can include machines, it can also include any number of office items including fire alarms, security systems, carpets, computers, and refrigeration.

What can be claimed?

In general, you can claim capital allowances when you buy qualifying assets. In the current climate, businesses are evaluating how they can optimise their workspace to provide a more flexible and agile working environment.

The items must be new or unused. You can claim a super deduction on:

• Office chairs and desks, particularly furniture that allows distancing between staff.

• Computer equipment and servers, for example laptops and equipment to enable staff to work remotely and more flexibly.

• The creation of flexible workspaces and areas within the office to facilitate collaboration may create opportunities to claim additional allowances.

• New heating or air conditioning systems, to increase the ventilation.

For businesses moving to increase or decrease office space:

• Blinds and curtains, carpets, and lighting systems.

• Microwaves, coffee machines, fridges, freezers, utensils and even cutlery racks can all qualify for capital allowances.

What can’t be claimed?

Unfortunately, cleaning items, hand sanitisers and PPE (disposable or reusable) typically fall under the general expenditure. Therefore, capital allowances would not usually be applicable to these items.

When are they suitable to use?

The allowances are only available to companies, and not to individuals or partnerships. It also makes sense to use if the investment is to be held until at least 1 April 2023.

When are they not suitable for businesses?

If you plan to dispose of the asset before 1 April 2023, a balancing charge will be due. This will effectively claw back the tax relief given. The balancing charge is then multiplied by the relevant factor 1.3. (Please note this applies only to the super-deduction and not the 50% FYA).

If you’re looking to purchase used or second-hand equipment, or you’re a sole trader or partnership, you may benefit from the Annual Investment Allowance (AIA) instead.

The AIA continues to be available alongside the new measures and remains at £1m until 31 December 2021 before dropping to just £200,000. However, the AIA can cover leased and second-hand assets.

How we can help

Separate and detailed records must be kept of the qualifying assets. Our tax team can determine what is eligible and help you with your claim. For further advice on making the most of super-deductions, please get in touch with a member of our friendly tax and business advisers.

Please visit www.carpenterbox.com

New look, but same great service!

We are very excited to announce that Carpenter Box has adopted a fresh new visual identity.

Our new look is modern and encapsulates our commitment to our clients, our team members, our communities, and our profession. Our focus continues to be providing exceptional client service during these unprecedented times. Though we may look different, Carpenter Box remains independent as it has been for nearly 100 years.

The locally delivered service we pride ourselves in supplying will continue to be our priority, with the support of our new international partner, PrimeGlobal.

We believe our new look together with our new tag line ‘Building a Brighter Future’ matches our commitment to making a difference to our clients.

For further news on our updated brand, visit www.carpenterbox.com.