The firm with 900 staff and no office

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Cate Huston

 

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Cate Huston’s team met in Thailand earlier this year

There’s a growing trend for firms to ditch their offices entirely, but is that good or bad for workers?

“Talent is evenly distributed but opportunity is often not,” says Cate Huston. “Working this way means you can access that talent and also give opportunity.”

She leads the developer experience team for Automattic, a large multi-national company where every single one of the 930 staff work remotely. The business has no fixed office presence at all.

“It’s a deep part of our culture, nobody even mentions offices anymore,” she told BBC 5 live’s Wake Up To Money programme.

“I’m office-free. We all just love the freedom and we travel to meet each other so we enjoy those adventures as well.”

Saving costs

Her employer is one of a small but growing number of businesses that are choosing to have no central office.

Faster internet connections, messaging and video apps, and the rise of collaborative and monitoring software are allowing some firms to do away with their offices entirely.

Instead, they hire staff from multiple locations and ask them to work from home or from shared working spaces near where they live.

Automattic’s staff work across 70 different countries and, instead of paying for a central office, the company pays to fly staff to regular meet-ups throughout the year.

It also pays workers to equip their home offices and helps them meet the cost of renting a work space, or for drinks if they work in a coffee house. But that is still cheaper than an office.

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Cate Huston

 

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Cate Huston says she and her co-workers love the freedom of not being tied to an office

“There’s definitely some cost saving to not having an office; you don’t spend money on the office, especially in the tech hubs like London and San Francisco and New York where office rental costs are shockingly high,” says Cate.

“But because we do really value the in-person time together we have these regular meet-ups. We have one for the whole company that happens every year and most teams meet up twice on top of that.

“We spend money on that, on flying everyone together. My team met up earlier this year in Thailand.”

‘Increasing trend’

Remote working is increasing rapidly, fuelled mostly by self-employed and flexible workers.

More than 1.54 million people work from home for their main job – up from 884,000 ten years ago, according to the Office for National Statistics Labour Force Survey, the largest study of employment circumstances in the UK.

Now some businesses are rejecting the notion they even need a headquarters, let alone office space for their staff.

“It’s definitely an increasing trend. It’s certainly very cost effective and attractive for start-ups,” says Ilke Inceoglu, professor of organisation behaviour at the University of Exeter Business School.

“From the perspective of employees, you don’t have a commute and that is a huge benefit.”

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The number of home workers has jumped in the past decade

Remote working may sound idyllic for anyone who has commuted during rush hour, but there are potential downsides.

Prof Inceoglu says: “Some people find it a challenge to draw a line between work and home-life. If you always work from home because you are office-less then where does your work stop and your home-life start again?

“It’s important to take steps to make sure there are boundaries.”

There are other risks to working from home. Mental health charity Mind has highlighted that remote workers may be at a higher risk of feeling lonely and isolated.

However, in a fully remote business, Prof Inceoglu says that risk may be reduced: “Feeling isolated is certainly a risk of remote working but if everyone is in the same boat then you already feel a sense of connectedness.”

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Remote working can actually help communication, believe some people

Jess Sims used to work for a company where every member of staff was in the office except for her. She now works for a fully-remote collective of freelancers called The Doers and says it’s definitely easier when everyone is scattered.

“When you are remote but everyone else is in the same place, you’re effectively watching through a window at all the office camaraderie that happens but you can’t be included,” she says.

“People forget to update you because you’re not around all the time. You have to chase people to remind them you exist.

“Now, I work with a remote collective and we are all in the same boat, we all work from home. And so we are all a bit more aware of what everyone is feeling and look after each other.”

‘Communicating well’

Cate Huston believes fully remote working can actually be good for communication. “Remote work makes the problems of work more explicit and then we can set out deliberately to address them.

“If you work in the same office it’s easy to think: ‘Oh we have lunch together every day so we’re a cohesive team that support each other,’ but that’s not necessarily true.

“When your team is spread all around the world like my team currently, we think much more deliberately about how to build ourselves as a team, how to make sure we are communicating well, are we documenting things clearly.” Let suppose you are thinking to run a restaurant then you need some furniture like tables, chairs, industrial bar stools and specially a good team.

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Inheritance tax: Rules on gifts to loved ones ‘should be simplified’


Older couple signing papers

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Fewer people should have to pay tax on gifts given just before death, under proposals for a major overhaul of the inheritance tax system.

At present, when someone dies within seven years of passing on money, property or possessions to loved ones, tax of up to 40% must be paid.

The Office of Tax Simplification (OTS) has suggested that this deadline should change to five years.

The OTS also said the tax should be made much easier to understand.

If the changes are approved by the Treasury, it could affect the finances of those who are financially planning in older age, and their younger relatives – many of whom are said to be relying on inheritance.

How does inheritance tax work?

Inheritance Tax is a tax on the estate – the property, money and possessions – of someone who has died. However, no tax is paid if the estate is valued at less than £325,000 or if anything above this threshold is left to a husband or wife, civil partner, charity, or a community amateur sports club.

Fewer than 25,000 estates are liable for the tax each year. That equates to less than 5% of all deaths.

However, 10 times as many estates need to complete and submit forms to check whether they are liable for the tax.

The tax is a major political battleground, partly owing to the fact many people are concerned about the tax and find it difficult to understand.

In January last year, Chancellor Philip Hammond asked the OTS to carry out a review.

Kathryn Cearns, who chairs the OTS, said: “Although only a small number of people pay inheritance tax each year, a far greater number worry about it. The OTS’s packages of recommendations would go some way to achieving the goal of making the tax easier to understand and simpler to comply with.”

What is the plan for gifts?

At present the rules are complicated. Anyone can give away £3,000 worth of gifts each tax year without them being added to the value of the estate. If unused, this allowance can be carried over to the following year, up to a maximum of £6,000.

They can also give up to £250 to anyone else. There is yet another allowance for gifting money towards wedding costs. A gift is also generally discarded for tax purposes if it is funded out of income, as opposed to savings.

It also proposes that the range of allowances is scrapped and replaced with a single, higher, annual gift allowance.

Usually it is the estate which is liable for inheritance tax. However, a recipient of a gift, if the giver has died within seven years, and has already given away more than £325,000, could be liable to pay inheritance tax.

To add to the complication, the level of tax is determined by the length of time between the gift and death.

If the individual does not pay the tax within 12 months, generally because they have already spent it, then the estate of the giver becomes liable.

Bill Dodwell, OTS Tax Director, said: “The taxation of lifetime gifts is widely misunderstood and administratively burdensome.”

The rules have not changed since the 1980s, but now the OTS has suggested that the seven-year rule is cut to five years, owing to the difficulty of finding paperwork that goes so far back.

What has been the reaction to this plan?

Some suggest that scrapping the existing taper system would mean some gift recipients face a larger tax bill.

Laura Suter, from investment firm AJ Bell said: “The suggestion of reducing the seven years down to five and scrapping taper relief entirely looks like a bald tax grab and revenue-raising move.

“Instead the taper could be simplified into a two-step process, for example, or if it is scrapped entirely then the period should be shorter than five years.”

The Treasury, which commissioned the report, said it would “consider the OTS recommendations carefully and will respond in due course”.

What other changes to inheritance tax have been suggested?

Some of the other recommendations in the report cover the link between inheritance tax and capital gains tax.

Currently, there is no capital gains tax paid on death and the report suggests that this puts people off passing on assets to the next generation during their lifetime.

It said that capital gains tax rules should be changed as a result. Some suggest this could make the system more complicated again.

However, it makes no recommendations surrounding one of the most complex areas of inheritance tax – the rules allowing people to leave their family home to their descendants.

The rule for scrapping inheritance tax on homes up to £1m was a major policy of the David Cameron Conservative government.



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