Workplaces are certainly not what they used to be. Alongside the changing nature of the workforce, our places of work have also seen dramatic change in the last few years.
Gone are the drab grey spaces filled with cubicles and harsh, artificial lighting – offices around the world are increasingly trying their hand at creating a fun, collaborative and inspiring work environment.
Originally leading the way for this trend were global tech companies like Google, Facebook and Twitter. Meanwhile, the rest of us looked on with envy, hardly even able to imagine a workplace with a slippery dip from one level to the next, sleeping pods, on-site cafes with free food, staff massage rooms, rock climbing walls, bowling alleys and communal garden areas where you can lie in a hammock to do your work.
And then there’s this company that works from a pirate ship…
While a lot of these more ‘out-there’ perks are still out of reach for most of us, businesses are increasingly realising the benefit of creating a fun and interactive workplace and are adding in features such as a fresh, open layout, an on-site gym, a full kitchen or a chilled out lounge area for staff.
Why our workplaces are changing
There are several reasons for this shift in thinking. There is the desire for a company’s office interior to match its ethos and culture, to create a sense of pride for employees, improve workplace enjoyment and satisfaction in a time when we’re spending more hours at work than ever before, a selling point to attract top talent and to foster staff collaboration and creativity.
For businesses looking to adapt to this way of thinking, the good news is that these improvements are more affordable than you might realise.
A modern office is realistic if you claim depreciation
While a lot of people gawk at things like a chill-out room or an office gym and think it’s something only the likes of Facebook or Google could afford, these features are a lot more reasonable when you factor in the extra cash flow generated from claiming depreciation on those assets.
So how does this work?
As a building gets older and items within it age, they depreciate in value. The Australian Taxation Office (ATO) recognises this and allows commercial building owners and tenants to claim deductions for the wear and tear on buildings, and the fixtures and fittings within.
Depreciation can be claimed in two ways; as a capital works deduction for the decline of the building structure, and as deduction for the depreciation of all plant and equipment items contained within the property.
Some lease conditions also state that tenants must return the property to its original condition once a lease expires. If a commercial tenant removes or disposes of any assets, a tax depreciation schedule can help show the value of the items being scrapped. Tenants are then able to write-off these items as an immediate tax deduction in the year the asset is removed for any remaining depreciable value. This would be the case if a business was thinking of making updates to their office and wanted to remove their existing furniture (provided it was part of their own fit out).
Businesses are able to claim depreciation on hundreds of items found within an office, including those increasingly found in these next generation workplaces. This means that if a business wanted to upgrade to a new fit out in line with this trend, they can claim deductions in the process.
Common trends in the coming years
While some business are going all out, there are some less-extreme things we’re likely to see in office spaces more and more over the coming years.
Businesses are increasingly providing larger, more homely kitchens for staff with communal dining areas and a range of appliances. Companies can claim depreciation on a number of items found in such areas including bench tops, fridges, bar stools, light fittings, tiling and fridges. This is also the case for ‘chill out’ rooms or staff recreation rooms where they can claim on lounges and other furniture such as pool tables, as well as for on-site staff gyms where work out equipment can be claimed, among other items.
A lot of companies are embracing ‘hot-desking’. That is, employees do not have one set desk, but get to choose where they sit each day, often at communal benches. This will typically be part of an open plan space with break-out meeting rooms provided. If a company wanted to embrace this trend, they could ‘scrap’ the old furniture and claim depreciation on the new.
Another trend that we are likely to see more of in coming years is improved sustainability in workplaces. Whether it’s solar panels, improved lighting solutions, furniture made from sustainable sources or larger windows, all of this is tax deductible.
And all of this is in addition to the items that businesses commonly claim deductions for already, such as air conditioning, computer equipment, flooring, electrical wiring, lighting, ceiling fans, fire extinguishers, security systems and smoke alarms, among many other things.
Office landlords and tenants alike should contact a Quantity Surveyor such as BMT Tax Deprecation for a tax depreciation schedule for their office. This schedule will account for every item that can be depreciated and is valid for forty years. If a business is considering renovations, it is a good idea to get a Quantity Surveyor to take a look both before and after the renovation in order to maximise claims.
The cost of obtaining a depreciation schedule is 100 per cent tax deductible.