Can My Limited Company Pay For My Garden Office?

With the increase in the costs of running an office and with the new way of working where full time office staff is not always required (Construction Admin Support like SaintVA) a garden office can provide you with a better way of working for your business.

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You might be using your kitchen table or even a spare room but the lines start to get blurred between work time and personal time. This is where having a separate workspace from your home can be a massive benefit to your productivity and well being for you and your family.

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If you have the space available, a garden office is a great option plus it comes with some tax advantages! You could have a simple shed costing a few hundred pounds or you can spend the extra cash to get some extra comforts like a spacious environment with heating, lighting, insulation etc.

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Can I Put The Cost Of A Garden Office Through My Limited Company?

The short answer is yes, you can purchase a garden office through your limited company however it does come with some tax considerations you need to be aware of.

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Can I Claim Tax Relief On The Cost Of A Garden Office?

If you build a garden office for your construction business it will be considered as a Structure for Tax Purposes. This means the costs of the building and installation are not tax deductible on your tax return nevertheless the company can still pay for it.

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Even though it is not tax deductible, it is still tax efficient for you and your business as the alternative is to withdraw the cash from your company and pay tax on this.

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Do I Need Planning Permission For A Garden Office?

This depends on the size and location of your Garden Office and most can be built without planning permission as most properties have “permitted development rights”.

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We would recommend speaking to your local council/qualified professional to confirm whether planning permission is needed.

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Are There Any Tax Benefits To Getting My Limited Company To Pay For My Garden Office?

Whilst you don't get full tax relief on the cost of the building and installation, you can still receive tax relief on the cost of the fixtures and fittings such as plumbing, carpets, lights, blinds, electrics and the furniture for the office!

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You will also be eligible to claim the running costs for the office such as electricity, water, repairs and maintenance.

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Can I Claim Back The VAT On The Costs Of A Garden Office?

If your construction company is VAT registered, then yes you are allowed to claim the VAT element back on the building and insulation costs of the Garden Office and on any VAT on fixtures and fittings.

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If you are on the flat rate scheme there may be restrictions to consider.

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Am I Allowed To Use The Garden Office For Personal Use?

If there is insignificant personal use then yes however if there is significant personal use then there may be a tax charge which needs to be reported to HMRC to cover the personal use element.

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What Tax Consequences Will There Be That I Should Consider?

If you are using your home to build a Garden Office for partial business use (i.e. not 100% business use) then you will not have to pay Capital Gains Tax (CGT).

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If you use your Garden Office for 100% Business Use, then you may need to pay Capital Gains Tax in part of the profit made on selling your house.

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The CGT charge would be limited to a percentage of the overall profit on the sale of your home based on the amount of your property the office occupies so 5% would mean 5% of the gain and it is highly likely that element of the profit will be cover by your Annual Exemption Allowance for Capital Gains Tax so don’t let this put you off!

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Considered a Garden Office But Want To Be Sure?

Feel free to reach out to the Saint Taxation team and they can through how you can get your limited company to pay for your office and assist you in the CGT calculations so you know exactly where you are before proceeding.

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