Coworking

What it means

Coworking is a shared office space where sole traders, freelancers and small firms rent a desk by the day, month or longer. The price usually includes internet, a kitchen, meeting rooms by the hour and often a reception that handles post and visitors.

There are hot desks, where you sit anywhere, fixed desks and private offices for a small team. For a new self-employed person or a startup it is a cheaper and more flexible alternative to a conventional lease with a long notice period and the cost of furnishing.

Many coworking spaces also offer an address for the registered office and mail handling. The service then overlaps with a virtual registered office, the difference being that the firm actually works there and can receive clients and official visits.

How it works in practice

A coworking invoice is an ordinary tax-deductible expense if the space is used for business. A VAT payer can deduct input VAT if the operator charges it. Under a long-term contract it matters whether this is a service or a property rental, because the VAT treatment differs.

For teams in hybrid work, coworking provides an office only for the days people meet. The employer remains responsible for health and safety, so it should know what conditions its staff work in, just as with a home office.

If the coworking address is registered as the registered office, the operator must consent to the entry and the contract should cover receiving post. Otherwise official letters may be returned as undelivered and important deadlines may pass unnoticed.

What to watch out for

A shared space also means a shared network and strangers at the next desk. Sensitive client data such as accounting records or payroll should not be processed over open Wi-Fi without a VPN, and screens should not be visible to others in the room.

Watch for automatic contract renewal and hidden charges for meeting rooms, printing or parking. When you leave and change the registered address, file the change with the Commercial Register in time, otherwise the register keeps an address where nobody collects your post.