Can I claim home office works as expenses?

[GEORGESTAM]

Thanks for this great community!

I am the director of a LTD and started recently to work from Home. I have a scary and dark basement which I would like to renovate in order to make it my home office. Can I claim those works (or part of them) as company expenses?

Many thanks!

 

[TimCaprica]

Georgestam,

It's not really a simple question at all.

Basically anything that is really just improving your house is unlikely to be tax deductible. Office furniture that you use just for work purposes after renovating probably is.

You would have to look at all the individual costs and ask yourself is this a business cost, is it only a business cost and therefore only ever be beneficial to my business (as opposed to you personally)?

I expect most the renovation costs will fail there but some of the furniture ones might pass.

 

[GEORGESTAM]

Thanks Tim!

Ok, your answer make sense, but how about if the cost will be beneficial for both business and personal? Currently it is not possible to work in the basement since there is a lot of damp...

Thanks again

 

[David Griffiths]

As Tim says, much more information is required, but in general the cost of buidling work is not tax deductible as it's capital expenditure. There are no capital allowances available on most building works either.

 

[TimCaprica]

Hi Georgestam,

If a cost is useful for business and personal then still generally it's not allowable. In some rare occasions (say a company car) you can say it is 50% personal and 50% business and claim half the amount. This would not work with house renovation costs.

One way to think about it is that when you come to sell your house one day you will most definitely personally benefit from a renovated basement. HMRC won't be able to see past that.

 

[GEORGESTAM]

Thanks David and Tim.

I guess that the answer is not... So, if I pay the expenses from my own pocket, could I at least pay me a rent from my company to me for the use of the basement?

Thanks again,

 

[TimCaprica]

Hi Georgestam,

Yes you can pay rent. The rules vary depending on whether your business is a sole trader/partnership or a limited company.

If sole trader then there is a specific formula to follow, details here.

If a limited company then it's either a scale rate of £4 a week or you can do something more complicated where you formally lease the room to the business. To decide how much you would probably use the self-employed formula but there are some things you need to be mindful of to make sure it 'works' so professional advice is required.

 

[simon_misiewicz]

One thing to consider is that any bills put against a company means by default that the business own a part of the building.

If you ever sold the building technically some of the profits would belong to the company. You may need specialist advice here but I was faced with the same thing