TAX TIP OF THE WEEK - Thinking of building a garden office, how could you benefit by getting your company to pay.

Since 2020 many business owners have realised that they can still operate effectively even from home. Meaning garden offices have become more popular.

As a company director then there can be some benefits of getting your company to fund the new office:

If your company is VAT registered then it will be able to recover the VAT paid on labour and material costs

You will be able to get tax relief in the form of capital allowances for all plumbing, heating, electrics, and insulation

You can claim further allowances against office furniture, equipment, storage, and other fittings.

Personal taxes will also be reduced as you won’t have to extract earnings from the company

The main restriction is that the company will not be able to claim against the cost of the building and structure, as HMRC class this as capital rather than revenue expenditure.

There are also some further considerations around BIK’s capital gains tax & business rates however these can be easily mitigated.

Hope this was helpful, for lots more tax tips and strategies get a copy of our 71 ways to save tax checklist