Can my limited company pay for my Optimum Garden Office?

There are now more and more people working from home within the UK. In fact, the office of national statistics has said there are now 4.2 million of us. For that reason, it’s no wonder many self-employed people are looking for the best ways to do so.

For some people, the issue of working from home is that you never feel you are never leaving work. However, a garden office away from the house is the perfect solution. With spring fast approaching, the option of working outside in a quiet and light space is very appealing. Without the distractions often found within the home you will be free to knuckle down and make the best use of your time.

Is it tax efficient to pay for my garden office through a limited company?

Whilst you are able to purchase your garden office through a limited company, there are lots of criteria to take into consideration, especially if you are hoping to benefit from some kind of tax relief.

As our garden offices are classed as structures, it’s normally not possible to claim tax relief on them. However, capital allowances can be obtained on items such as furniture and equipment installed into the building, such as shelves, desks and storage units.

Despite the fact electrical wiring and thermal insulation is included in the main structure of the garden building, you can claim a capital allowance on these too. Usage costs such as electricity, gas (if required) and water can be claimed as business expenses. Along with any maintenance/ repair work required to your garden building.

Can I receive VAT related benefits if my company is VAT registered?

If your limited company is VAT registered and not under the flat rate scheme then it is able to purchase the building and its contents at its full purchase price. You will then be able to claim back the VAT on the cost.

If your company is on the VAT flat rate scheme it gets more complicated. You are unable to claim back VAT on the garden office purchases unless you spend more than £2,000 on one single purchase. You are able to claim back VAT on the goods but not the services related to the garden building purchase. ‘Goods’ are the actual building itself whereas the ‘service’ is the installation of the building. You will require an itemized invoice for each of these in order to claim back the goods only.