Tuesday, December 14, 2010

Tax and your garden office

One of the most common questions we're asked is whether shedworkers can set the cost of their garden office build against tax. We've covered it before here and in the Shedworking book where we suggest that, basically, yes, you can, but our general advice is always to talk to your accountant/tax adviser first or even to ring the tax folk up themselves and ask their opinion. However it's always good to get more opinions on the subject and there's an interesting write-up at the Society of Virtual Assistants' site. Here's a snippet but please do read the whole thing:
The Taxman will treat the cost of the garden building as capital expenditure, as the item is expected to last for some years. You are only allowed to deduct the cost of capital expenditure from your profits for tax purposes when the item purchased qualifies for a so-called capital allowance.

All equipment that is used within the business qualifies for a capital allowance. But your garden office is not a piece of equipment, it is a structure in which the business operates, – at least for part of the time. So on the face of it you cannot deduct the cost of the garden building from your profits. This applies even if the building is theoretically moveable, such that it can be dismantled and reconstructed elsewhere if required.

If your business is VAT registered you can reclaim the VAT charged on the cost of acquiring and installing your garden building, on your quarterly VAT return.
Tuesday posts are sponsored by The Home Office Company, manufacturers of unique garden rooms since 1998. Now in 10 exciting new colours. Click here for more details.

No comments:

Post a Comment