The cost to small businesses of the return to the office

Businesses are under pressure to bring staff back into the workplace, with the government worried about the damage done to town-centre economies with so many people working from home. However, the costs may be off-putting for many employers: one recent survey found the average SME would have to spend almost £22,000 to bring everyone back. Nucleus Commercial Finance says the figure comprised costs such as new health and safety measures, reconfiguring the workplace, and investments in new technologies.

The bad news is there is no specific financial support for employers incurring back-to-work costs. They will be able to set these against their profits for corporation tax purposes, like any other cost, but that’s about it. The £1,000 job retention bonus, payable to employers for each member of staff who took part in the furlough scheme and still employed in January 2021, may be useful. But it’s payable whether your staff are back in the workplace or still working from home.

In the absence of financial support, many SMEs will wonder if asking staff to come back is worth it, assuming they can function effectively working remotely – all the more so given apparent rises in productivity. In a survey by Vodafone 40% of small businesses think they have been more productive since staff began working at home; many employees have opted to work during the time they previously spent commuting.

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David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.