Garden office products/suppliers

[b0redom]

So I bounced this backwards and forwards a lot before settling on expensing it through the company, but NOT offsetting against CT. It's a company owned asset (so I can claim the VAT back), but the HMRC guidelines specifically say that you can't claim it back buildings unless they're specifically for site use (eg portacabins which will be moved from site to site). It specifically mentions that these type of office buildings are not offset-able mentioning a school building an outside classroom.

I can now reveal that it definitely is strong enough for a full sized adult to walk around on the roof as there's a guy doing just that, bolting bits together in the torrential downpour.

[TheCyclingProgrammer]

If you fund it from your company does it become office space & therefore eligible for business rates?

Possibly but depends on your local authority. I contacted the VOA and they suggested it probably wouldn't have any significant rateable value. I've got the email somewhere.

[TheCyclingProgrammer]

So I bounced this backwards and forwards a lot before settling on expensing it through the company, but NOT offsetting against CT. It's a company owned asset (so I can claim the VAT back), but the HMRC guidelines specifically say that you can't claim it back buildings unless they're specifically for site use (eg portacabins which will be moved from site to site). It specifically mentions that these type of office buildings are not offset-able mentioning a school building an outside classroom.

I can now reveal that it definitely is strong enough for a full sized adult to walk around on the roof as there's a guy doing just that, bolting bits together in the torrential downpour.

Yes, I was aware it's not tax deductible for CT for the reasons you state. But the VAT saving plus higher rate dividend tax saving is still significant.

Regarding VAT - are you on the flat rate scheme? If so were you able to get the supplier to separate out the goods (the office) from the services (delivery and installation) as they are normally priced as a package but you can only claim VAT on capital goods over £2k on the FRS.

Presumably you are putting through the various fixtures and fittings as capital allowances?

Are you doing this with full planning permission or under permitted development? If the latter, did you check with your local authority if they would accept a company owned garden office as being within permitted development (due to the "incidental use" clause) either informally or by submitting a request for a lawful development certificate?

[d000hg]

If it's a company asset on your personal property does that raise issues when you come to sell?

[b0redom]

Yes, I was aware it's not tax deductible for CT for the reasons you state. But the VAT saving plus higher rate dividend tax saving is still significant.

Indeed, around £4k in my case.

Regarding VAT - are you on the flat rate scheme? If so were you able to get the supplier to separate out the goods (the office) from the services (delivery and installation) as they are normally priced as a service but you can only claim VAT on capital goods over £2k on the FRS.

Yes I'm on FRS, they give you a complete breakdown of everything, including cabling, double glazing options, lighting, number of sockets etc etc.

Presumably you are putting through the various fixtures and fittings as capital allowances?

Yes.

Are you doing this with full planning permission or under permitted development? If the latter, did you check with your local authority if they would accept a company owned garden office as being within permitted development (due to the "incidental use" clause) either informally or by submitting a request for a lawful development certificate?

Permitted development. I didn't bother checking with the local authority as that question never came up in all my digging.

[TheCyclingProgrammer]

This was the email I had from the VOA from when I lived in London - I will probably have to contact the VOA local to me to see if they have the same view:

From the information you have provided it is unlikely that these premises will be assessed for business rates.

If there is no signage displayed and there are no business callers and the office/shed is also used for domestic purposes then I think we would take the view that this is included in your domestic Counicl Tax banding for your house.

If the shed/office was assessed it is likely that the value would be so low that the local authority would not charge business rates.
This is assuming that you have no other business premises elsewhere.

I see no point in taking any further action.

[TheCyclingProgrammer]

If it's a company asset on your personal property does that raise issues when you come to sell?

Yes, but nothing that can't be overcome.

1. You'd need to sell the office from YourCo to the new purchasers and account for VAT on the sale. To reduce the faff you could just buy the office off YourCo personally (accounting for VAT) and not involve your purchasers.

2. It has the potential to restrict your claim for PRR on any capital gain you make on your house but in practice its unlikely to be an issue. For example, with a few back of a fag packet calculations I estimated that a 3x3m garden office would occupy no more than 5% (and that's a conservative estimate) of my property. That would make 5% of any capital gain on selling the house liable to CGT. However given the CGT allowance, I'd have to make a gain of over £200k before any gain would exceed that.

The big trap of course is that you could argue there is a small amount of personal use to mitigate the CGT and business rates issue but this increases the risk of their being a BIK - to avoid this you would have to show that any personal use was insignificant.

[b0redom]

If it's a company asset on your personal property does that raise issues when you come to sell?

Yes, so you'd either have to sell it from the company to yourself, or have it taken down and moved. TBH, the cost of moving would absolutely dwarf the cost of buying the office building anyway (which is one of the reasons we bought the office building in the first place).

[TheCyclingProgrammer]

Permitted development. I didn't bother checking with the local authority as that question never came up in all my digging.

OK, well just so you're aware any permitted development use needs to be "incidental to the enjoyment of the main dwelling house". It depends on your LA but they all seem to have their own interpretation of whether or not this would cover a garden office. I exchanged some emails with a local planning officer and his view was that it might require planning. I intend to go down the route of getting a certificate of lawful development.