Sunday, March 04, 2018

Can I claim tax relief on my garden office?

It's a perennial question so no apologies for coming back to it. As always there are various viewpoints, but there is a useful piece of crowdsourced advice at, part of the LexisNexis setup. Here's the query:
My client is a self-employed carpenter. As well as carrying out work in the homes and premises of clients he has to do much preparation at home. Because his business has expanded, he has recently demolished his garden shed and replaced it with a more substantial workshop. He seems to expect that the full cost of about £15,000 can be included as a deduction in his accounts.
Here's part of 'Bramble's' answer:
The workshop itself (in other words, the base, floor, walls and roof) forms the setting in which the carpenter carries on part of his trade. The expenditure on its construction does not qualify for plant and machinery allowances (PMAs) because it is not within CAA 2001, s 21 and s 22 and as confirmed in Yarmouth v France [1887] 19 QBD 647. An appropriate proportion of the net demolition costs of the garden shed should qualify for PMAs by adding it to the cost of the new replacement plant in the workshop (see HMRC’s Capital Allowances Manual at CA22210).
Here's a snippet from 'Milburn Moneybags':
The expenditure on the workshop is capital in nature, with relief being available only by way of plant and machinery capital allowances in relation to that part of the expenditure that has been incurred on integral features, fixtures and other fittings and plant and machinery. Other than these, capital allowances are generally denied in relation to buildings and structures.
You can read the whole thing at here. As always, we would strongly recommend you talk to your financial adviser before claiming anything.

Image: Ptmoney ------------------------------------
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