38 finance


Serviced offices – beware of the pitfalls


Most companies at some stage will use serviced offices - be it as a new business starting up or a larger company needing temporary accommodation, writes Chris Duggan of Griffins


The first part of the process is finding your office and negotiating the contract. Most of the rates that you see advertised are not the rates that tenants pay – or if they do, they receive a substantial rent-free period. Points to consider which may not be brought to your attention are:


• There will be an annual rate increase included in the standard terms and conditions. If you are there longer than 12 months exclude this clause, otherwise your rent will go up after 12 months.


• Consider the true cost of the telecoms and internet package for your office. Your telecoms will be far more expensive here than on the open market and any discounts are taken by the office provider and not passed on. Consider the true cost of the telecoms and internet package


for your office. Most people see a 30% increase in telephone call charges with some as high as 50%. Also do not pay per person for internet, try to pay for just the connection irrelevant of the number of people connected to it.


• Look at the specific office you will be taking and ensure the decoration and carpet are up to specification before you sign or add that to the term of the agreement. If there are problems, ask for them to be rectified before you move in.


• When you have got the price as low as you can, ask for free meeting rooms for so many hours each month (include refreshments too) as this is always offered as an inducement and will save you money.


• Get a realistic feel for how the centre and its staff perform by talking to other companies already there.


• Check out the availability of car parking at the centre.


• Make sure you are aware of any extra charges added on to services they provide.


• Look at the agreement and specifically exclude exit charges.


• Lastly make sure what you have agreed is reflected in the agreement. The agreements are always standard and you must make sure any special discount or waiver of terms is specifically mentioned.


This is an extract from a longer article which includes advice and tips for when you are actually


Budget: PwC comments on impact for small to medium-sized businesses


Privately-owned businesses will have welcomed the chancellor’s opening statement that this is a Budget that rewards work and backs business. The obvious question is will they feel he delivered that?


There were a number of positives:


• reduction in corporation tax rate to 24% from April 2012 (originally expected 25%) and further reduction to 23% then 22% in subsequent two years;


• reduction in higher income tax rate from 50% to 45% from April 2013 – the most concrete signal yet that the 50% rate is indeed a “temporary necessity”;


• for those who have spent their working lives building their business and are now looking to save for retirement, no further tinkering today with pensions reliefs;


• a particular win for those companies who can use the Enterprise Management Incentive (EMI) – an increase in the limit per individual to £250,000 (subject to EU state aid approval) and a proposed extension of Entrepreneurs Relief to shares acquired through EMI.


www.businessmag.co.uk


Ray Thomas, tax partner at PwC Reading, commented: “For university research led start- ups, the proposed consultation on extending EMI to university academics will be welcomed and very small businesses (less than £77,000 turnover) will be eager to see what comes out of the proposed consultation on a simpler basis of tax accounting.


“What they didn’t see is a review of Capital Gains Tax – many believe there would be a benefit to enterprise in having a differential CGT rate to act as a broader incentive for individuals with private wealth to invest in unlisted trading businesses.


“Those who compete Internationally for talent, whilst welcoming the chancellors’ resolve in reducing the higher income tax rate to 45%, will remain concerned that the UK income tax rate (at 47% including uncapped NIC) is still comparatively high. They will be hoping that this is a step on a journey to keep the UK competitive and 'open for business'.”


Details: Ray Thomas 0118-9383278 ray.e.thomas@uk.pwc.com


THE BUSINESS MAGAZINE – THAMES VALLEY – APRIL 2012 Chancellor George Osborne


in your new offices and points to consider when you leave. To read the full article visit: griffinsaccountantsreading.co.uk


Details: Chris Duggan c.duggan@griffins.co.uk 07980-009649 www.griffins.co.uk


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