Corporate Renovation Tips
Tax Credits and Deductions: Corporate Renovations in Canada
Without careful planning and a corporate specialist, the corporate renovation you’re planning might well drain your company’s finances. Most companies don’t realize it, but there are several tax deductions and tax credits by which they can benefit while undergoing a corporate renovation. With D.J. McGauley & Associates and the appropriate tax deductions, the costs of your office renovation will be much lower than usual.
One important deduction is in Line 8960 for expenses accrued in maintenance and repairs. This will allow you to deduct the cost of labor, maintenance and repairs for any maintenance work and minor repairs for the property you use to earn income. This applies to parts of your office that have not undergone major repairs but have nonetheless undergone maintenance and improvements. Excepted from this deduction is the value of your own labor and costs of repairs that are capital in nature, which are deductible in the next section.
Undergoing a corporate renovation will inevitably mean the acquisition of new capital assets, which may qualify as a deduction under capital cost allowance. This deduction applies to furniture, equipment, and technologies acquired for the use of business or professional activities. While you cannot deduct the entire cost of the property right away, you can deduct its depreciable cost over time depending on its estimated lifetime.
While undergoing a renovation, you might make use of supplies that would otherwise not qualify under the two preceding sections. This is where you can apply for a deduction under this section. Here, you can deduct items that the business used indirectly in its business, allowing certain refurbishments done to your workspace that are not directly related to your business goals to be deductible.
Accounting, Legal and Other Professional Fees
A renovation will require external professional advice or services that will entail consulting fees. For such expenses, you can apply for a deduction under this section. With this deduction, you can put to rest any fears that consultation with specialists will only increase the costs of your renovation.
If you plan on leaving the commercial building for a period of at least 90 consecutive days, you may qualify for a rebate of the tax you have already paid.
Make sure to tune in next week as we discuss Tax Deductions and Credits in Corporate Relocation in Canada.
Corporate Expansion: Relocation or Renovation? (Part II)
Last week we began the discussion of renovation vs. relocation during the corporate expansion process. There are several questions that need to be asked and subsequently answered before deciding whether to relocate to a new office or to renovate your current workspace. To simplify the decision-making process, D.J. McGauley & Associates has prepared a checklist of questions that you should consider. The list continues below…
4. How will the expansion affect your bottom line?
Whether you relocate or renovate, you should first calculate the monthly costs it will entail. Will relocating increase your basic costs? Will renovating be more costly for your business in the long run, in terms of maintenance, because of the increase in lease?
Carefully evaluate which of the two options will increase the efficiency of the employees, offer better access to workers, and improve the visibility of your business among several other factors. It all boils down to how it will affect your bottom line, given the interplay of expenses and projected earnings.
5. Do you want to tweak or complete re-brand your company image?
The avenue of corporate expansion you choose will ideally affect your customers and clients as much as it will affect your employees. Many businesses have strategically chosen corporate relocation to jump start their company’s image. This relocation is just one of the many changes they undertook—along with offering new products and services, changing their vision, and sometimes, even changing their names! If you want a fresh start in the truest sense, then a corporate relocation may be exactly what you need.
On the other hand, some companies are reluctant to take such a measure but at the same time express a desire to contemporize their workplace and improve its layout, energy efficiency, and technology. This is where renovation is a more viable option.
6. Do you want no disruption to your operations?
Whether you choose renovation or relocation for your corporate expansion, you can’t lose sight of your business goals—the achievement of which is the entire reason why you’re expanding in the first place. For this reason, you need a corporate relocation and renovations specialist that will ensure that the expansion will go smoothly and will take into account the achievement of all your organizational goals. D.J. McGaulay & Associates will do this, and more; it will also help you understand your new facilities better and provide the assistance needed for post-relocation or renovation.
Corporate Expansion: Renovation vs. Relocation (Part I)
As companies become more dynamic and globalized, corporate expansion is inevitable. Corporate expansion usually involves either the renovation of the workplace or relocation to an entirely new facility. Both corporate relocation and corporate renovation can not only allow a company to meet the growing demands of the business, it can also encourage the workforce to move forward and achieve their goals in a better, more suitable environment.
At D.J. McGauley & Associates, we are often asked by our transitional clients to offer advice on whether it is time to renovate existing office space or relocate to a larger corporate facility. While the choice is ultimately yours, and each situation is unique, it is important to look at both sides of the coin before making such an important and game changing decision. This is why, over the next two weeks, we will be looking at factors that might help you decide whether it is time to renovate or relocate your office space.
1. Are you planning to have an expanded workforce?
If you’re planning to expand and hire a number of employees and the floor area of your current workplace cannot possibly accommodate your target number of employees, then it’s time to relocate. Otherwise, your expanded workforce will have to cram themselves in a tight office space and your business will suffer from decreased productivity. It is also imperative to find the perfect potential new space that fits your budget and at the same time will allow all your employees to comfortably work in their own spaces.
2. Do you want to improve your operations and systems?
The workplace environment is a major factor in employee motivation. If your current workplace is shabby, poorly lit, and/or made of subpar materials, what you likely need is a redesign of your office space—in which case you might want to go for a renovation.
A renovation is also in order if you want to upgrade your furniture and appliances, as well as the systems and technology required to perform employee tasks. It is important to set clear goals and outlines in order to integrate new equipment and systems into your current office structure seamlessly and with as little downtime as possible.
3. Is location a primary consideration?
For one reason or another, you may not be satisfied with the current location of your office. Maybe it’s because the location is not accessible to your target market, clients or expanding workforce. Perhaps it’s not near to your suppliers. Another reason most businesses cite is that they simply want to be in the central business district. For example, if you started your business in a small plaza on the outskirts of Toronto but you’ve always dreamed about relocating to that downtown Bay Street location, it might be time to realize your dream instead of putting your money into a renovation. In other words, if location is a primary factor in your corporate expansion, then corporate relocation should be your choice.
Still haven’t made up your mind? Tune in next week while we continue this discussion with a few more important points to consider.
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Corporate Space Planning & Relocation Advice 