Leeway with 'wholly and exclusively for business use' regarding furniture?

[ladymuck]

Funny thing. Bloggs estate had a garden room installed about three years ago. It's basically just used as a posh shed. But it's far better looking than a basic shed. Nonetheless, today, the exact same timber building would be at least 2x what we paid for it. Might have a hard time explaining how it has depreciated when it's still in perfect condition?

Why would you depreciate it? Have you seen the price of sheds at the moment, it's appreciated in value if anything.

I don't understand why posters here are working on the assumption that every asset falls in value over the period of ownership when they're happy to invest in shares, rare wines, cars on the expectation that they will appreciate in value.

I suppose the same posters are forgetting that depreciation expense is not allowable for CT which is worked out on profit BEFORE depreciation, so you're not going to reduce a tax bill by claiming your £50k garden shed has lost 50% of its value this year.

[Lance]

Why would you depreciate it? Have you seen the price of sheds at the moment, it's appreciated in value if anything.

I don't understand why posters here are working on the assumption that every asset falls in value over the period of ownership when they're happy to invest in shares, rare wines, cars on the expectation that they will appreciate in value.

I suppose the same posters are forgetting that depreciation expense is not allowable for CT which is worked out on profit BEFORE depreciation, so you're not going to reduce a tax bill by claiming your £50k garden shed has lost 50% of its value this year.

the point of depreciating an asset is more about it's value when you 'dispose' of it though.
Not valid for a shed I grant you.

Some businesses use asset values to inflate the value of the company artificially (either to help a sale, or just to stay solvent). Years ago I had a trawl through my then employers assets. Most if was stolen BT NTE units and 10 year old Cisco routers, all valued at £1k each. Suffice to say that the solvency of the company based on that didn't help when they didn't pay the staff pension fund.

[ladymuck]

the point of depreciating an asset is more about it's value when you 'dispose' of it though.
Not valid for a shed I grant you.

Agreed - which is why I'm challenging the assumption that spending out on a shiny garden office and then claiming it's worth a fraction of that when you sell, even though property prices will most likely have gone up, is 'creative accounting' at best but most likely fraudulent.

[northernladuk]

Agreed - which is why I'm challenging the assumption that spending out on a shiny garden office and then claiming it's worth a fraction of that when you sell, even though property prices will most likely have gone up, is 'creative accounting' at best but most likely fraudulent.

Because everyone is letting the tax/greed tail wag the dog. When you are looking for a way to cheat the tax man common sense and facts often go out the window.

[Fred Bloggs]

Because everyone is letting the tax/greed tail wag the dog. When you are looking for a way to cheat the tax man common sense and facts often go out the window.

Correct. That's why gobbing off to your mates in the local coffee shop about how your partner's business has paid for the shiny new garden room is a bad idea. You really don't know who is overhearing the conversation and what they might do with that information.

[d000hg]

Why would you depreciate it? Have you seen the price of sheds at the moment, it's appreciated in value if anything.

Freecycle and FB marketplace is full of people giving away old sheds. Like snooker tables and large home gym equipment, their resale values tend to plummet due to sheer inconvenience.

Agreed - which is why I'm challenging the assumption that spending out on a shiny garden office and then claiming it's worth a fraction of that when you sell, even though property prices will most likely have gone up, is 'creative accounting' at best but most likely fraudulent.

A little shed-office isn't 'property' though really is it, it's more like a greenhouse or static trailer?

If people here are talking about having extensions built that's very different.

[WTFH]

A little shed-office isn't 'property' though really is it, it's more like a greenhouse or static trailer?

If people here are talking about having extensions built that's very different.

Does having a garden office (not just an outside toilet or "little shed"), with electricity and internet connection affect the value of a property?

[northernladuk]

Does having a garden office (not just an outside toilet or "little shed"), with electricity and internet connection affect the value of a property?

In this day of WFH and done properly then hell yes. The amount will depend on the existing property and the quality of the office (i.e. wood building or fully insulated things you can buy) but either way at very worst it's cost neutral. The cost of the office will add the same to the property but then factor in percentage increase on the enhanced property price then it makes money.

If there is ample room already and it's a nice to have then it will trend to cost neutral. If it is a new quality 'room' the existing property doesn't have then absolutely. It adds an extra useful room to a house and that 'cool' factor some people like. It's the type of thing that hits the title '3 Bedroom property with outside office' type thing.

[WTFH]

In this day of WFH and done properly then hell yes. The amount will depend on the existing property and the quality of the office (i.e. wood building or fully insulated things you can buy) but either way at very worst it's cost neutral. The cost of the office will add the same to the property but then factor in percentage increase on the enhanced property price then it makes money.

If there is ample room already and it's a nice to have then it will trend to cost neutral. If it is a new quality 'room' the existing property doesn't have then absolutely. It adds an extra useful room to a house and that 'cool' factor some people like. It's the type of thing that hits the title '3 Bedroom property with outside office' type thing.

Exactly, so when I see posters saying that a garden office is a depreciating asset, I really have to question if they are serious about an office, or are just arguing for a tax dodge they want to try out.

"Welcome to my garden office, paid for by my company. Now, if you squeeze past the lawn mowers and BBQ, you'll find a stool in the corner, where I can work on my laptop, tethered to my mobile phone and work until the battery goes flat"

[northernladuk]

Exactly, so when I see posters saying that a garden office is a depreciating asset, I really have to question if they are serious about an office, or are just arguing for a tax dodge they want to try out.

"Welcome to my garden office, paid for by my company. Now, if you squeeze past the lawn mowers and BBQ, you'll find a stool in the corner, where I can work on my laptop, tethered to my mobile phone and work until the battery goes flat"

Absolutely, or as I said, trying to address the situation from purely tax perspective with no eye on the actually reality of doing it.