The financial implications of garden offices

The 2020 pandemic has meant that the majority of office workers have been forced to work remotely. With the trend for home and flexible working set to continue, it is no surprise that many small businesses and remote workers are setting up separate working spaces within their home.

Interestingly, searches around 'garden office' have increased by 350% over the past 12 months, so if you are one of the many workers looking into separate office space within the home, we have researched into the financial implications for you and what tax relief can be claimed.

Converting an existing space into a garden office

If the building already exists (such as a garage or summer house), it is possible to claim tax relief for any furniture or equipment installed within the building during the conversion - this could include items such as desks or shelving. In the majority of cases, you will be able to claim tax relief in the year purchase.

It is also possible to claim a capital allowance for any improvements that are made during the conversion, such as thermal insulation, wiring and plumbing costs. This is also the case for the running costs of the garden office - for example, lighting and heating.

If you intend on using your garden office for personal use outside of office hours, such as somewhere for your children to play or additional communal family space, you will incur personal tax costs. It can be difficult to prove to HMRC that you do not intend to use the space for any personal matters, so be prepared to pay this 'benefit in kind' tax.

Creating a new office space

If you are looking to build a new outbuilding or office space within your residential property, it would be classed as a structure. This means it is not usually possible to claim tax relief for the costs of the building itself. This is also the case for claiming against the costs of any planning or installation.

As a general rule, garden offices are considered to be permitted developments, so can be built without planning permission. However, you need to ensure you follow certain conditions, including ensuring the structure is a maximum height of two and a half metres and doesn't cover more than half the land surrounding the residential property. If your home is a listed building, there may be restrictions, so it is important to check the regulations before any construction begins. For further advice on how to apply for Listed Building Consent visit the Kirklees Council website.

Our team are always on hand to advise on the best course of actions for your business - if you need any support speak to us today.

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