Value Engineer Your Office Refurbishment
How can I reduce the cost of my office refurbishment? It’s a question we get asked nearly every week. Our exact answer varies depending on the scope of the project as well as the client's needs. Most of our suggestions, however, fall into one of 3 categories. These categories are: minimise build out, maximise tax relief, and value-engineer nice-to-haves.
By minimising the amount of partitioning being added or moved, you reduce all the supporting work required. This includes electrics and HVAC. Maximising the tax relief will ensure you are paying as little as possible without taking anything out from your project. Deciding what are the nice-to-haves and then reducing or eliminating them will generate significant project savings. Just as importantly, it won't impact the success of the final product more than necessary.
At Zentura, we’ve refurbished hundreds of offices across the UK over the last 3 decades. These range from light touch renovations at serviced offices, to full strip out & fit out projects for banks. We understand that an office refurbishment is a big investment for any company. Minimising the cost is important. It’s also important that you reduce the impact cost reductions have on the quality of your final product. In this article, we’ll explain why these 3 categories reduce the cost of your refurbishment with minimal impact on the end result. We’ll also give you some suggestions on how you can implement them in your office refurbishment.
Minimise Build-Out
The one thing you can do that will have the biggest reduction on the cost of your office fit out is to reduce the quantity of walls built. Building partitioning is labour and material intensive, so it's very costly.
What really increases the cost of partition build out, however, is the amount of supporting work required. Often, services such as lighting, fire detection and floorboxes have to be reconfigured to suit the new layout. And if the new layout requires adaptations to HVAC or sprinkler systems, the cost increases even more. For these systems, even small configurations require the whole system to be decommissioned before the works, and then recommissioned once the works are complete.
The best way to reduce the amount of partitioning needed in your office furniture is to use zoning furniture and office pods. Companies often think they need to build out meeting rooms, but this isn't always the case. Office pods can often do the job just as well, and often cheaper. There are a wide variety of pods available, from stand-up call booths to 16-person meeting pods. These come in a range of designs and price points, so there is bound to be something that meets your requirements. Our sister company, Fluid, has a wide variety of office pods available for purchase and rental.
Partitions are also commonly used to create barriers between different areas of the office. Zoning furniture can serve this purpose, and help keep your space open and welcoming at the same time. Zoning furniture is also available in a wide variety of styles. These range from vertical acoustic panels to curtain systems to modular planter units. Fluid also has zoning furniture available for purchase and rental.
Maximise Tax Relief
Tax relief can save you up to 25% of your office refurbishment costs. However, few companies fully understand how to maximise the available tax relief schemes. As a result, they miss out on huge potential savings. The first thing to establish is what works are classed as repairs and what works are classed as improvements. This matters because all repair works can be classed as an expense, making them automatically tax deductible. Redecoration and flooring are two areas generally accepted as repair works, as long as you are replacing like-for-like.
The most beneficial tax relief scheme currently available in the UK is the “super deduction”. This expires on 31st March 2023. Under super deduction, companies investing in eligible plant and machinery assets will get a 130% first-year tax allowance. This allows companies to cut their tax bill by up to 25% for their qualifying investment. The relevant asset category for office refurbishment under the super-deduction scheme is "office furniture" (including desks, chairs, meeting pods, and storage units). Property improvements such as upgraded flooring do not qualify, as they are not plant or machinery.
The other relevant tax relief scheme is the Annual Investment Allowance (AIA). This is a form of tax relief designated for the purchase of business equipment. You can deduct the full value of an item that qualifies for AIA from your profits before tax. This is claimable on eligible on assets up to £1,000,000. Most assets purchased for business purposes can be claimed as qualifying expenses for AIA. The categories most relevant for office refurbishment are “Office equipment” (including office furniture), and “certain fixtures” (including air conditioning, fitted kitchens, and bathroom fittings).
We’ve written a full article explaining both of these allowances and how you can reduce the cost of your office refurbishment through tax relief schemes.
Value Engineer Nice-to-Haves
The final area you can save significant sums on your office refurbishment is by identifying the nice-to-haves and then respecifying them. You could even eliminate them altogether, depending on how much you need to cut costs.
This is where it is essential to have a well-defined project brief right at the start. If you need to reduce the cost of your office refurbishment, it's important you don’t eliminate essential parts of your office. Doing this could decrease the performance of your people. When you need to value engineer, you can compare your design with what you need the project to achieve. This will enable you to identify the nice-to-haves that aren’t necessary to meet project goals. Some managers may want large private offices, but is it a worthy investment if they are only in the office 2 days a week?
Some things like furniture or lighting should not be respecified. This is because cheaper options can reduce staff productivity and even cause health issues. However, there are some ways to create cost savings that have little impact on the performance of your people. You can often specify a much cheaper fabric for the furniture that will do the job nearly as well. Another way is to respecify the flooring. There are a lot of options available, and you will likely be able to find a similar style at a lower cost. As this is such a high-quantity item, even a small reduction in cost per sq/ft can generate significant savings.
Planning Your Office Refurbishment
An office refurbishment offers your company the chance to bring your office up to date, and improve the performance of your people. It’s important that you achieve your goals within your budget, so exploring these 3 opportunities will help you to minimise your costs.
Minimising the build out of partitions will lower your costs because they are very material-intensive. It will also reduce very expensive services adaptions, especially for HVAC and sprinkler systems. Maximising tax relief through the super deduction and AIA scheme will mean you pay as little tax on your project as possible. Value engineering the non-essentials in your design will reduce the investment you need to your office fit out without impacting the quality of the finished project.
Want to take the next step with your office refurbishment? Request a no-obligation call with one of our office refurbishment experts today. Whether it’s a light-touch refresh or a complete redesign, we have the track record to deliver your office refurbishment project with minimal disruption to your business.