Limited Co paying for Home office - incl structure.

[russy01]

Afternoon,

This year I have suffered some health set backs leaving me unable to drive (up to a year) and the side effects make it hard for me to work back in my own offices with my staff. Also recovery, drugs & fatigue has changed the way I live, i.e I get good and bad moments and thus my working hours can change daily...

I am considering building an outdoor office at home, so I can be completely flexible without interruption of others. I know you can claim for furniture etc for home offices, but most sources say you cannot claim for structures.

The build (groundwork and building) is going cost £40-50k.

Considering my predicament do you think I can argue the toss on this? If not, the company will have to pay for a chauffeur and serious changes to offices in my building!

Thanks,

Russ

[MattyD803]

Worth a chat with an accountant, but from my experience having tried to explore similar, the answer has been No. Not unless you actually re-classify your property (partially?) for Commercial/Business use, which then attracts other costs and complications (insurances, applicable rates etc), its a messy one.

I work from home pretty much full time and I've struggled to even get agreement (from my accountant) that I can claim for the Air Conditioning unit in my home office, which I've suggested I need specifically for security reasons means I need to keep my windows (Ground Floor) closed, even during hot weather.

I also store (quite literally) a shed load of tools and equipment at home, that I use when I do visit site and I've not been allowed to claim for the storage unit I bought and even had to fight for the racking system, as apparently it would be "difficult to justify that it is wholly and exclusively used for company purposes". The system seems particularly 'sewn up' but I guess that is there because too many people have previously misused such claims.

All in all, all I am allowed is £26/month as a home use expense, which is rubbish. Or maybe my account (and the previous who gave me the same advice) were real sticklers....?

[russy01]

MattyD803 said:

Worth a chat with an accountant, but from my experience having tried to explore similar, the answer has been No. Not unless you actually re-classify your property (partially?) for Commercial/Business use, which then attracts other costs and complications (insurances, applicable rates etc), its a messy one.

I work from home pretty much full time and I've struggled to even get agreement (from my accountant) that I can claim for the Air Conditioning unit in my home office, which I've suggested I need specifically for security reasons means I need to keep my windows (Ground Floor) closed, even during hot weather.

I also store (quite literally) a shed load of tools and equipment at home, that I use when I do visit site and I've not been allowed to claim for the storage unit I bought and even had to fight for the racking system, as apparently it would be "difficult to justify that it is wholly and exclusively used for company purposes". The system seems particularly 'sewn up' but I guess that is there because too many people have previously misused such claims.

All in all, all I am allowed is £26/month as a home use expense, which is rubbish. Or maybe my account (and the previous who gave me the same advice) were real sticklers....?

Mine basically say no to everything... I think they get rewarded the more tax I pay!!

Im sure there has been a huge amount of misuse where people get themselves a lovely bar in their garden or whatever... but in my case it makes the difference of whether I can work effectively or not! Plus my business pays and collects millions of tax annually, so Id hope a sensible approach can be taken!

[MattyD803]

russy01 said:

Mine basically say no to everything... I think they get rewarded the more tax I pay!!

Im sure there has been a huge amount of misuse where people get themselves a lovely bar in their garden or whatever... but in my case it makes the difference of whether I can work effectively or not! Plus my business pays and collects millions of tax annually, so Id hope a sensible approach can be taken!

Good luck - hopefully there will be another forum member along shortly who might be able to advise a different 'tact' you can approach this with.

[jonathan_roberts]

In Austria, you can write this off if you designate your home office as your main place of work. It has to be demonstrably provable and you can only have a certain number of visits to the main office with no permanent desk there. This line of thinking might be worth exploring.

[Mr Overheads]

Plenty sub-£5k https://dunsterhouse.co.uk/garden-offices
Say another £5k for groundworks and desk, chair etc if being really generous.
Another £5k because you pick a luxury model, still only at £15k/

Why £40k to £50k?

[kevinon]

jonathan_roberts said:

In Austria, you can write this off if you designate your home office as your main place of work. It has to be demonstrably provable and you can only have a certain number of visits to the main office with no permanent desk there. This line of thinking might be worth exploring.

This feels like a grown-ups view of the world.

Not a chance in the UK. There's 10,000 pages of tax regulations, and counting (pun intended)

[russy01]

Mr Overheads said:

Plenty sub-£5k https://dunsterhouse.co.uk/garden-offices
Say another £5k for groundworks and desk, chair etc if being really generous.
Another £5k because you pick a luxury model, still only at £15k/

Why £40k to £50k?

Thats not my question is it?

[trickywoo]

All you really need to know is that virtually nobody does it as it’s not worth it.

Edited by trickywoo on Monday 12th May 16:09

[Eric Mc]

UK tax regulations do not give much in the way of Income Tax/Corporation Tax relief for actual building construction or purchase costs. This applies whether the building is an actual commercial property or a garden office. SOME of the ancillary costs associated with kitting out the office MIGHT be allowable under the Capital Allowances claims system.

[Lefty]

OP you might be better looking into renting (or buying) office space nearby instead.

[russy01]

Eric Mc said:

UK tax regulations do not give much in the way of Income Tax/Corporation Tax relief for actual building construction or purchase costs. This applies whether the building is an actual commercial property or a garden office. SOME of the ancillary costs associated with kitting out the office MIGHT be allowable under the Capital Allowances claims system.

Mmm ok, sounds pretty clear then.

[ecs]

I looked into this and it was a definite 'no'. I ended up renting space in a local Regus and then another local serviced office - the good thing with these sorts of places is it's just one payment for everything, no rates or extra charges for phone/internet. Obviously not as convenient as an office in your back garden however, but the tax stuff gets complicated very quickly.

[russy01]

Lefty said:

OP you might be better looking into renting (or buying) office space nearby instead.

I live in a small village in rural somerset! The nearest town where you can rent space is the town where our office building is!

So, it looks like I’ll have to pay 25% corp tax, then 40% div tax - to create an office (which will have VAT) to continuing working…

This country.

[Lefty]

There are, I believe, ways around it, I am not 100% convinced of the legitimacy of some of them. If you own agricultural land (as a farmer or estate owner) and the land is owned by the business you can get phased relief on construction of a building for business use. Or if you are renovating / refurbishing an existing building you can get 100% relief.

So if you happen to own a small farm, Croft, smallholding or woodland etc there are ways to make it work. The definition of “small” is probably kinda woolly - for example I know of a plot of land about 2 acres with some woods and an old Nissan hut on it that sold for 20k recently. You don’t need to be buying hundreds of acres of prime agricultural land.

[Pistom]

The key point I would have thought is whether it is wholly and exclusive for business use but if it was wholly and exclusively business, then part of your home would be business premises which opens other issues.

I have a room in my house which is wholly and exclusively for business use. My accountant has OKd the desk, shelves, computer and storage cupboards and I get the £26/month. What has never been clear is if I can claim 2 x £26 as I run 2 businesses from it but for the sake of £26/month, I just claim the one lot.

[MustangGT]

Pistom said:

The key point I would have thought is whether it is wholly and exclusive for business use but if it was wholly and exclusively business, then part of your home would be business premises which opens other issues.

This. Potential council tax/business rates issues, potential change of use issues. Just put up a garden office for £10-15k and use it. No potential issues then.

[Eric Mc]

You won’t get tax relief on construction costs - unless the building fits into a specialist category (which a garden office would not).

[russy01]

Yes it will be for business use only! I don't actually want an office building in my garden at all... but this will be only way I will be able to work going forward for a long period of time, if not ever.

Sounds like a waste of time and if I want to do it I have to fork out tax paid funds for the structure at least.

Plus those saying just get something for £10-15k - its not as simple as that, ground work will cost that considering the location.