With employees returning to the office, now’s the time to prepare your workspace to become a place for increased collaboration and productivity. Take advantage of the new temporary full expensing scheme this end of financial year. Purchases on technology, office products, furniture and kitchen essentials could be tax deductible in full this year.
We spoke to Dr Adrian Raftery, principal of Mr Taxman and author of ‘101 Ways to Save Money on Your Tax – Legally!’ to recommend the top five ways you can refresh your workspace this EOFY.
Why is it important to refresh your space?
“EOFY is a great way to invest in your people and their work environment. Great employers know that the cost of losing a valued employee is huge. Their loss will likely hit the bottom-line multiple times over the years, not just once, so leveraging EOFY tax breaks to create a better work environment for your people is always a smart move!” says Dr Raftery.
“Some simple ways to make the most of EOFY to benefit your employees might be to refresh your office with new furniture, invest in a new lunchroom or think about adding to the technology you offer to make work-life more productive and more enjoyable,” he adds.
Why should you take advantage of EOFY?
“With the new Temporary Full Expensing measures in place this year and next, the EOFY sales can be a nice mid-year present from the ATO for eligible businesses!
“This new tax concession allows a business with a turnover under $5 billion to effectively claim an immediate deduction on the business portion of the cost of eligible new depreciating assets this year or the next two years, regardless of their cost. This means that businesses can invest in new equipment for the team and claim the tax deduction in full in their 2021, 2022 or 2023 tax return,” explains Dr Raftery.
“When buying multiple office products and expensing them in full, it may generate a net tax loss for your business. In years past, you would have had to wait for profits to be made in future years to gain the tax benefit of that loss. However, under new Loss Carry Back Tax Offset rules this year, the business could be eligible to claim back the tax paid last year. This has huge cashflow benefits. Keep in mind that aside from the ‘under $5 billion turnover’ requirement, this concession is only eligible to businesses structured as companies with sufficient franking credits and not available to sole traders, partnerships or trusts,” says Dr Raftery.
Five ways to refresh your workspace:
1. Invest in a quality coffee machine
On average it takes around 20 minutes for an employee to find coffee outside the workplace when it’s not available inside. Multiply this by the number of workdays in a year and the result is more than 80 hours of lost productivity per employee, per year. Investing in a coffee machine can boost staff morale and save your business thousands of dollars of cost in the long run.
2. Create a breakout space with new furniture
In a study conducted by Winc, one in three employees said they could concentrate better after a break. When investing in furniture, consider providing comfortable seating for lunchrooms and break out spaces. The lunchroom is often overlooked at tax time but there are clear productivity benefits in helping employees relax and recharge on-site during breaks.
3. Upgrade office workstations
Desks, height-adjustable workstations and chairs are all items that could be tax deductible. An absolute must for office workers is an ergonomic task chair. With Australian workers spending approximately 76 per cent of their time at work sitting1, it’s important to help prevent the occurrence of common musculoskeletal injuries caused by bad posture and help employees feel more comfortable throughout the workday.
4. Refresh reception and front of house areas
Take advantage of EOFY sales to refresh reception areas and waiting rooms with furniture that could be tax deductible. Create welcoming spaces for customers and visitors with a range of stylish furniture that speaks to your organisation’s brand and company values.
5. Complete the home office
Another workspace to think about refreshing when preparing for the end of the financial year is the home office. Tech products and accessories that support productive working while keeping employees mobile are often tax deductible. Think about laptops that allow for an easy transition from working on-site to working at home; a monitor for the home office for greater ergonomic working; or a shredder to safely dispose of confidential information in the home office environment.
1SafeWork NSW, 2021, ‘Sedentary work’, <https://www.safework.nsw.gov.au/hazards-a-z/sedentary-work>