Garden office

[BlueSharp]

First of all I have asked my accountant and know I can't expense it! Has anyone built one, do you use it, anything to lookout for?

We have someone coming around to do a site survey for one tomorrow.

[The Spartan]

First of all I have asked my accountant and know I can't expense it! Has anyone built one, do you use it, anything to lookout for?

We have someone coming around to do a site survey for one tomorrow.

That's strange two of people I worked with recently both built offices in the gardens and it was allowable, I wonder what the difference was?

[Lance]

That's strange two of people I worked with recently both built offices in the gardens and it was allowable, I wonder what the difference was?

Different details....

Maybe the office was a prefab unit that will be sold when finished with. That may be allowed.

What’s not allowed is when the company pays for a building that effectively becomes the personal property of the director.

What is allowed is for the director to pay for it personally and rent it to the company.

[DimPrawn]

Different details....

Maybe the office was a prefab unit that will be sold when finished with. That may be allowed.

What’s not allowed is when the company pays for a building that effectively becomes the personal property of the director.

What is allowed is for the director to pay for it personally and rent it to the company.

Isn't that red flag for some kind of tax investigation? ie. an excuse for HMRC to pop round, see the office and "whilst we are here, can we look at you IR35 status determination documents and look through you contracts?"

[edison]

I know someone who did exactly this, spent about £12k and it was allowed as an expense (probably a capital one) by her accountant. I think it was allowed because technically it was movable.

Considering the change to home working preferences, if you have a decent size garden, it's a very good investment for your property.

[Lance]

I know someone who did exactly this, spent about £12k and it was allowed as an expense (probably a capital one) by her accountant. I think it was allowed because technically it was movable.

Considering the change to home working preferences, if you have a decent size garden, it's a very good investment for your property.

It might be but better to buy it personally. I’m thinking of building a pub in my garden that my business rents as office space.

[b0redom]

First of all I have asked my accountant and know I can't expense it!

Yes you can.

Mine is a prefab from Garden Buildings | The UKs Leading Provider | Green Retreats

If and when I move house I plan to take it with me. That's one of their key selling points.

Mine is fully wired for networking (armoured Cat6) and power from the house.

My last few contracts have been 90%+ remote.

Has anyone built one

Yes

do you use it

Yes

Yes anything to lookout for?

If I were doing it again, I'd probably run water/waste water whether or not I plan to connect it up as it's easier when they're digging the trenches. I'd also consider split unit aircon (which was an option, but not an eyewateringly expensive option) when I had mine fitted.

Definitely get external PIR sensors on the outside as this costs next to nothing and is way better in the winter/at night when you can't see snails on the path.

[Lance]

Yes you can.

Mine is a prefab from Garden Buildings | The UKs Leading Provider | Green Retreats

If and when I move house I plan to take it with me. That's one of their key selling points.

Mine is fully wired for networking (armoured Cat6) and power from the house.

My last few contracts have been 90%+ remote.


Yes


Yes


If I were doing it again, I'd probably run water/waste water whether or not I plan to connect it up as it's easier when they're digging the trenches. I'd also consider split unit aircon (which was an option, but not an eyewateringly expensive option) when I had mine fitted.

Definitely get external PIR sensors on the outside as this costs next to nothing and is way better in the winter/at night when you can't see snails on the path.

To be clear though.... what happens if you don’t take it with you?
I know that if it’s years after the company is closed you’re all good. But I presume it’s an asset in the books and buildings depreciate very slowly.

[b0redom]

If I don't take it with me I guess I'd have to sell it to myself (from the company) at fair market value at which point I can sell it as part of the house.

For me it's kind of moot though as I don't plan to move (at least in the short-mid term).

In any case I would have been paying ~ £200/month for train tickets, plus travel time etc etc. Having a dedicated work space (and it *is* a dedicated work space) is worth its weight in gold especially during the current epidemic. I've done 2 remotely proctored professional exams for example, which just wouldn't be possible in the house with 3 small kids running around.

[TheCyclingProgrammer]

I have a garden office. I paid for it myself.

You cannot expense a garden building built on your own property - trust me I have researched this to death. To be precise, your company could buy it but it would be a bad idea because a) it's not tax deductible for YourCo and b) it would result in a BIK charge. You'd save on the VAT (even if you only partially reclaim it due to any personal use of the building) but that's about it.

In short (you can search the forum if you want to find a more detailed answer on this):

* Buildings are not eligible for capital allowances. The whole idea about it being a "moveable" building is just a tax wheeze thought up by somebody who doesn't understand the rules on moveable buildings. Just because a building is technically moveable does not make it plant. It needs to be something that is normally moved about in the course of your trade (e.g. if you're a portacabin business the cabins would be considered plant). So no corporation tax saving to be made on the cost of building at all.

CA22110 - Capital Allowances Manual - HMRC internal manual - GOV.UK

* Buildings (along with yachts and a few other things) are specifically excluded from the rule regarding assets made available to a company director if provided/constructed at the director's home. This rule allows you to provide office equipment and laptops etc. without incurring a BIK. This provision does not extend to buildings constructed on the director's property. Therefore, the director should face an annual BIK charge for having the asset made available to them.

The rules in question:
EIM21611 - Employment Income Manual - HMRC internal manual - GOV.UK

The rule that explicitly excludes buildings or structures:
EIM21612 - Employment Income Manual - HMRC internal manual - GOV.UK

* VAT can be reclaimed by the company but it should generally be apportioned to account for any personal use of the building. You need there to be some personal use of the building to avoid running into other personal taxation issues (e.g. potentially losing some CGT relief when you sell your home) or potentially making the building liable for business rates.

The best way to do this is:

* Pay for the building personally.
* Check that the building meets permitted development rules - even if it meets all the requirements of size and location its use needs to be "incidental to the purpose of the main dwelling house". Clerical work with no visitors should be fine but its worth considering getting a lawful development certificate to be sure.
* YourCo can pay for fitting it out for the most part - equipment, furniture etc, if it's mostly going to be used for working in. Some of these things may be expenses, some may be capital assets. Examples include desks, storage, a decent chair, computer equipment, printer etc., maybe a small sofa, coffee machine etc. - talk to your accountant.

The upshot of the above is while you miss out on the VAT saving, you need not worry about the taxman sniffing around, you're very unlikely to have to worry about business rates or CGT issues when you sell (and you also won't have the complication of having to sell a company owned building as part of a house sale either).

A decent 3x3 to 3x4m sized garden office, fully lined and plastered, should come in anywhere from £12-15k inc. VAT (you can get lower spec for cheaper and also some really high end buildings that cost a lot more). So you're looking at missing out on a £2.5k saving at most by paying for it personally. But it may add more than that in value to your house, especially with the rise of remote working, so I wouldn't worry too much about it.

My office was also from Green Retreats and I do recommend them.