Home Garage - Dual Home/Business Use implications?

[johnrees]

Hello,

I'm an engineering contractor and am thinking of investing in some equipement to allow me to produce one off prototypes in my garage, should it be necessary (or profitable..) to do so at any point in a contract. I want the business to own the equipment (company assets) but I'm a bit concerned that this might imply that the garage is now for business use only, and I don't want to have to start going through change of usage, paying business rates etc, as I expect that I will only ever be using it in this way pretty infrequently.

Does anybody else do this who can offer advise? Also Any advise on how the equipment purchase would need to be treated in my books would be appreciated - at the moment I'm assuming I would just need to identify it as capital expenditure - i.e the same as my laptop which depreciates over time.

Thanks in advance,
John

[Paddy]

Hello,

I'm an engineering contractor and am thinking of investing in some equipement to allow me to produce one off prototypes in my garage, should it be necessary (or profitable..) to do so at any point in a contract. I want the business to own the equipment (company assets) but I'm a bit concerned that this might imply that the garage is now for business use only, and I don't want to have to start going through change of usage, paying business rates etc, as I expect that I will only ever be using it in this way pretty infrequently.

Does anybody else do this who can offer advise? Also Any advise on how the equipment purchase would need to be treated in my books would be appreciated - at the moment I'm assuming I would just need to identify it as capital expenditure - i.e the same as my laptop which depreciates over time.

Thanks in advance,
John

I know someone who is doing the same on a self employed basis. He has kitted his new garage out nicely but it still looks like a garage. He even had visitors from the USA who wanted to see his “factory”.

Put all the assets through you company or yourself but don’t mention or claim for the garage. Don’t chat to the neighbours about it either. It will be a bother if the local council get involved. If anyone asks, it is temporary use only.

[Paddy]

I know someone who is doing the same on a self employed basis. He has kitted his new garage out nicely but it still looks like a garage. He even had visitors from the USA who wanted to see his “factory”.

Put all the assets through you company or yourself but don’t mention or claim for the garage. Don’t chat to the neighbours about it either. It will be a bother if the local council get involved (Change of use, toilets, health and safty etc etc). If anyone asks, it is temporary use only.

The above advice has saved you a fortune. Please donate a bottle of red wine.

[AtW]

The above advice has saved you a fortune. Please donate a bottle of red wine.

[MarillionFan]

I know someone who is doing the same on a self employed basis. He has kitted his new garage out nicely but it still looks like a garage. He even had visitors from the USA who wanted to see his “factory”.

Put all the assets through you company or yourself but don’t mention or claim for the garage. Don’t chat to the neighbours about it either. It will be a bother if the local council get involved. If anyone asks, it is temporary use only.

WHS. Obviously you can rent you garage to yourself as well as a legitimate expense. I do so for a nominal £75 per month for the garage and another £75 per month for the office. In my case both through different companies

The above advice has saved you a fortune. Please donate a bottle of red wine.

Oh and I'll have a glass of that as well.

[vetran]

What sort of prototypes? May be interested either as a customer or as a collaborator, had a thought along similar lines myself earlier in the week.

Obviously not as advanced in it as you, but It seems an odd coincidence.

[Sysman]

The deeds of my first house had a specific clause that prohibited me from running a business from it, though my solicitor reckoned that was to prevent someone from setting up a car repair business or the like there, or lots of customers coming and going; a desk and a filing cabinet wouldn't cause any harm if I kept quiet about it.

What the others said about using a garage: keep quiet about your intentions and if asked say it's a hobby. Also be sensible about any noise you generate - hammering / drilling / sawing / machine noise too late in the evening will generate complaints from your neighbours.

[MattH]

I'm in the process of doing the exact same thing. Sort of. I'm clearing out the garage so I can get a decent size lathe in it and so forth and also our Mondeo. I might be looking at contracting after 13 years in IT but 17 years in engineering still calls to me load'n clear! Not 100% sure how I'll use it though. I have a plan fo start very slowly and see how it goes - if contracting takes off it'll be more a hobby.

[johnrees]

Thanks for the advice all, Vino is in the post.....

Would be mechanical stuff rather than electrical, just small scale as and when required. I'm doing research and test work at the moment, so I imagine any short term requirement would be for small working models for visualisation purposes or maybe test fixtures/brackets etc.

One question about charging my company rent for the office space - wouldn't I then be running the risk of declaring that the garage is for business use, and therefore attract business rates and potential change of usage issues? I'm just thinking of the way I handle usin my study as a home office occasionally - I don't charge my company rent for that....... Damn am I missing another trick??

[SueEllen]

Thanks for the advice all, Vino is in the post.....

Would be mechanical stuff rather than electrical, just small scale as and when required. I'm doing research and test work at the moment, so I imagine any short term requirement would be for small working models for visualisation purposes or maybe test fixtures/brackets etc.

One question about charging my company rent for the office space - wouldn't I then be running the risk of declaring that the garage is for business use, and therefore attract business rates and potential change of usage issues? I'm just thinking of the way I handle usin my study as a home office occasionally - I don't charge my company rent for that....... Damn am I missing another trick??

Talk to your accountant on the best way for your business to rent office space from you personally.

But generally as long as no-one can hear you banging around, you don't have any visitors to your premises and it's small scale stuff then no - there is no business rate liability.

The main issue you would have is getting adequate insurance coverage to cover you as while home insurers are happy to cover people who do desk work who work for home with no visitors, there are less policies for people who do what you do.