We first started Zyla Accountants by working from home, coffee shops and meeting clients at their offices. As our client base has grown we have seen the value in joining a co-working space so that we have a place to meet our clients and to be involved in the co-working community.
We started our co-working journey at wework in Hammersmith and Brook Green but soon moved as we did not find a sense of community and the beer on tap was not a deal breaker for us. The idea of wework is great but unfortunately the execution of wework doesn’t quite match.
Next we moved East to Plexal City in the Olympic Park and we loved it there! The layout of the workspace itself is what drew us so far East and being surrounded by innovative tech startups was a perfect mix for us. In the end we decided to move because the commute become too long for us as we live closer to West London.
This brings us to our first private office at The Workary Avonmore as part of Wimbletech, who have transformed under-utilised library + public space in partnership with local Councils to ‘make it possible for entrepreneurs to live good lives, to grow their businesses within spaces that they love, around people they care about, whilst contributing and giving back to their local community.’ We are proud to have moved into our first private office as we expand the team and we love the community environment at The Workary. We also feel that we are far more productive and focused having our own private space.
Key points for us when picking a co-working space have been:
- Environment / productivity
As always, there are tax implications to consider when switching to a co-working space.
The tax implications of a work space depend on the amount of time spent there and also the duration, for limited companies the questions to consider:
Are you going to spend more than 40% of your time there?
Are you going to be going there for more than 2 years?
If both of these conditions are met then this constitutes ‘ordinary commuting’ and your travel and associated costs ie food & drink expenses are not tax deductible.
1) Working from home
Obviously you will have no travel costs and the expense of working from home can be tax deducitble. As a sole trader you’re allowed to take a proportion of all your home running costs prorated for number of rooms used for business and numbers of days worked from home. Or alternatively you can claim a flat rate allowance per month for your light, heat and power. The flat rate allowance is set by HMRC and depends how many hours you work from home each month:
- 25-50 hours: £10 per month
- 51-100 hours: £18 per month
- 101 hours or more: £26 per month
As a director of a limited company you cannot claim any fixed costs and the HMRC flat rate allowance for use of home is £4 per week.
2) Working & meeting clients at coffee shops
This will be deemed a temporary workplace therefore expenses are tax deductible.
3) Hot desk at a co-working space
If you use a co-working space occasionally and pay a daily rate every time you do so, this will still be classed as temporary. For a limited company if you only spend roughly 2 days a week there and do not plan to be there for more than 2 years, expenses are tax deductible.
4) Fixed desk / private office at a co-working space
As your usage of the co-working space becomes more permanent your travel and food expenses may not be tax deductible. As a sole trader if you’re working there on a regular and predictable basis, you can’t claim back the associated travel costs. For a limited company if the company directors and employees in question expect to be at the space for two years and spend at least 40% of their time there, you can’t claim back the associated travel costs.
If you need any further guidance on your current workplace situation and travel expenses get in touch [email protected]