How your boss gets £1,884 of value for every £1,000 spent on Coworking

More than 40 of these free!

For most members of The Skiff, their membership is a business expense.

The last couple of years have seen an influx of remote working employees joining. Most of them have employers who will pay for their membership directly or allow them to expense all or part of it. Sadly, there are still a few employers who don’t provide that kind of support.

If you’re reading this article you’re unlikely to need to hear the benefits of Coworking.

We all know how good it feels to spend time around other humans. After being stuck at home for so long we crave it. A few individuals might still need convincing of the productivity and wellbeing benefits of Coworking.

That’s a topic for another post.

Experienced business owners know how valuable it is too.

They’ve been spending serious cash on workspaces and professional gatherings for generations. They’ve paid people extra to travel to London for work. They understand just how expensive it is to run an office.

So, in this post, I’m going to focus purely on the financials.

What does it cost to provide office space?

The 2021 Total Office Cost Survey gives an indication of what employers typically pay to provide space to their employees.

The total cost of having office space in central London is around £120 per sq ft per year. So space for 30 people would cost around £240,000 per year (£8,000 per person ~£34 per working day). In the west end it goes as high as £190 per sq ft per year. That’s £380,000 per year (£12,666 per person ~£54 per working day).

These are costs of running their business so there is no VAT in those figures and they won’t pay any corporation tax, income tax or national insurance on it.

Let’s get a little closer to home with the figures for Brighton and property similar to our own.

The survey estimates our total costs at £72.57 per sq ft per year. So a space our size should cost around £145,000 per year to run (£4,833 per person ~£20 per working day). That’s 25% higher than our current costs.

We’ve not included salaries or surplus/profit in our current costs so it’s probably about right.

Members who need to use The Skiff 8 days a month or more pay an effective day rate of between £13 and £22 per day with a 1st or 2nd Mate membership. (yes they are getting a great deal!)

But, if an individual pays for The Skiff out of their own pocket (rather than as a business) they have loads of tax to pay too.

We have to charge VAT (20%), they will have paid income tax, and both they and their employer will have paid national insurance.

So here’s the thing:

Those (unfairly) charged taxes mean every £1,000 an employer pays in coworking membership per year is worth the equivalent of a £1,884 pay rise to an employee who would be paying it for themselves.

• £480 Income Tax
• £200 VAT
• £165 Employers National Insurance
• £39 Employee National Insurance

If you’re worrying about how to give pay rises that stay ahead of inflation this might help both you and your employees.

The Skiff is here to help individuals

The Skiff will continue to support people who can’t expense their membership to a business with free or discounted membership for 3 months at a time

Please apply here if that’s you:

https://theskiff.org/sponsored-membership

All we ask if you are employed, and especially if you are earning over £40K per year, please try and make a case to your employer. Tell them what it would mean to you personally beyond the financial benefit.

If you’d like someone to read a draft email to your boss I am very happy to help.

I used to be a director of a 50+ person company. And I’ve supported many other employers too. There are few things I enjoyed more than being able to say “yes” to employees making very reasonable requests like this.

Your employer may well feel the same.

Are you an employer who already supports coworking memberships?

We want to shout about you from the hills — even if your staff don’t choose to work from The Skiff.

Send us your job listings and we’ll share them with our audience for free. If you want to go a step further and really stand out from the growing crowd we have the perfect thing. You can become a sponsor of The Skiff.

Sponsorship starts from just £25+VAT which is enough for us to cover someone’s membership for a day.

Email hello@theskiff.org if you’d like to learn more.

Photo by Colin Watts on Unsplash