UNDERSTANDING THE FINANCES
OF DESIGN AND FIT-OUT
Creating great space
MAKE YOUR NEXT OFFICE MOVE OR REFIT
DECISION LESS TAXING
It is a familiar challenge to most companies –
how to transform your workplace or plan for a
much-needed expansion without it putting the
business under undue financial pressure?
This is so important for business owners to
understand, especially those who may be making their
first major workspace change since the recession;
and knowing it could be one that will last the entire
lifespan of the business. The common mistake is to
let haste and ignorance badly influence the decisionmaking process.
Too often companies will trip themselves up by
coming into the project too late and failing to ensure
a workspace change is properly planned and tied to
budget considerations.
Likewise, businesses are unaware of the opportunities
that exist to maximise a spend on commercial property
investments
In addition, there is a lack of understanding of the
complexities of a fit out, such as the timescales
involved or the problems of linking the work to the
likes of a telecoms system or statutory consent
considerations.
It all points to the need to only undertake a move or
fit-out once a comprehensive understanding of your
business, and how the workplace actually performs,
is undertaken. This insight enables a robust, costSS0024 Sept 15 V1
Graeme
Nisbet
Phil Muir
Studio
Director at Space
Solutions
Regional Manager
North
East
effective solution to be developed that delivers the
required results – yet minimises costs.
Once the project is defined, businesses should look
to seize the advantage of implementing the fit-out
or move though a ‘turnkey’ solution - where a one
multi-disciplined team for all professional services,
such as architects, surveyors, project managers
and contractors, operates under the one roof. It
provides total confidence of an on time and on
budget delivery,
For companies with one eye on cost, the advantage
of having all aspects of your workplace project
handled under a ‘turnkey solution’ is powerful, as
well as being financially beneficial.
Immediately, there are savings to be made by taking
advantage of a blended rate, rather than separately
negotiated – and inevitably more expensive –
individual fees for professional services.
What’s more, having a unified team provides for
better continuity of project delivery, as all involved
are in regular communication with each other. That
ensures that should any problems arise, it is clear
who has responsibility to resolve them, within a
01
clear and agreed timescale.
Key Considerations:
Compare this to the traditional tender method, where
an architect handing over to a contractor will not have
had the same level of interaction and knowledge,
creating opportunity for delays and confusion.
While many companies will have planned their office
change through capital expenditure or bank loans,
it is sensible to be aware of opportunities that do
exist to maximise spend through the use of Capital
Allowances or Leasing.
Capital Allowances should be considered any time
capital expenditure is incurred on commercial property
or on any asset used in your trade – so perfect for new
build, refurbishments, fit-out and property acquisitions
and disposals – as they offer valuable tax relief
benefits.
Leasing is a method of finance that allows you to ‘rent’
your project from a lender and offset the payments
against taxable profit. Any business can lease, and in
particular, leasing offers a cost effective alternative
to capital expenditure when fitting out or refurbishing
a workspace. The 100% tax allowances can mean it
may work out cheaper than utilising working capital.
•
Give yourself as much time as possible to
plan for your workspace move or refit to
ensure you capitalise on all the benefits that
can be achieved.
•
Be aware of how to use your property assets
to help achieve your commercial goals.
•
Engage with an expert who can advise on you
workplace aspirations.
•
Be aware of the opportunities that exist to
make your property investment go further.
•
Seize the advantages of a turnkey solution to
deliver your project on time and on budget.
References:
1.
Figures based on experience of projects undertaken by Space Solutions
2.
Johnston Carmichael – www.jcca.co.uk
3.
Plus Finance – www.plusfinance.co.uk
We work with a number of specialist agencies and
always look to suggest Capital Allowances and
Leasing as sensible methods to save on costs.
So if you are looking to progress a workplace project
that needs a faster route to delivery, while costs are
being kept well under control, this may open your eyes
to what can be achieved.
SS0024 Sept 15 V1
02