ERECTING A BUSINESS USE BUILDING ON YOUR OWN LAND

[Secure Systems]

After renting commercial property for over 10yrs and the Landlord increasing rent by 50% I have decided to erect my own building on my land. The building is 12 x 9M , concrete base, steel walls and roof, all fully insulated. Total cost is expected to be around £35K +VAT.

My initial concern was planning BUT after discussing with our local council they confirmed the building could be erected without the need for PP ( Height less than 4M at Apex, more 5M from highway, less than 50% of garden space, more than 2M from a boundary) under the "lawful proposed development scheme".

However from a taxation point of view, I now have a concern that as a sole trader ,I cannot claim any costs associated with the build such as materials / labour ect.....I can reclaim the VAT but that appears to be at best.

Can anyone advise the best way to manage this situation tax efficently? The contractor has advised invoices can be broken down to suit my needs.

Many thx for any help,
Matt

 

[DWS]

You will be able to claim CA for the fixture and fittings, but I strongly suggest if you are planning to spend that amount of money that you sit down and discuss this with your accountant first.

 

[WaveJumper]

If you put ‘home office tax implications’ in the search function there’s been a lot of threads on this topic you may find very useful

 

[kulture]

I would also look into insurance, in case having a commercial building on your land may affect your current residential property insurance. You also need to think about Rates, as a 100% commercial property on you land would likely to be subject to business rates. Finally consider capital gains tax, when you come to sell your home the portion set aside for commercial use may be taxed as a capital gain.

Clearly if the building as not 100% business use, and shared its usage with domestic storage (like my garage which always seems to fill up with stuff) then it may well avoid all the above.

 

[Secure Systems]

Hi All, thank you for your feedback, to be clear this building is 100% for business storage purposes.
Yes the building will require insurance to cover items which I realise is tax deductable.

The building can be broken down into 3 sections.....the groundworks / the steel structure kit / assembly.........surely there is some tax benefit to be had here ?
Thx
Matt

 

[Deleted member 59730]

The building can be broken down into 3 sections.....the groundworks / the steel structure kit / assembly.........surely there is some tax benefit to be had here ?

How long do you intend to live there? Have you thought what you would do when you sell? Is a steel structure kit an attractive asset to a future purchaser? Would a multi-purpose attractive structure add more value?

 

[Secure Systems]

How long do you intend to live there? Have you thought what you would do when you sell? Is a steel structure kit an attractive asset to a future purchaser? Would a multi-purpose attractive structure add more value?

If we moved the structure would be taken down and sold for a nominal amount.....probably scrap as its highly unlikely anyone would want a 12x9M steel erection. We could build something more attractive and value adding BUT it will be a lot more then 35K plus VAT.

Of this 35K a sizeable amount will be the ground works as rock will need need to be dug out and appropriate drainage established....Surely this is cover around a 1000tonnes will need to be moved...surely this is covered under CA?

 

[Scalloway]

Of this 35K a sizeable amount will be the ground works as rock will need need to be dug out and appropriate drainage established....Surely this is cover around a 1000tonnes will need to be moved...surely this is covered under CA?

You will be able to claim CA for the fixture and fittings, but I strongly suggest if you are planning to spend that amount of money that you sit down and discuss this with your accountant first.

Speak to your accountant before you make an expensive mistake. CAs won't be available if it is built on your house's grounds and you are a sole trader.

 

[STDFR33]

https://www.gov.uk/guidance/claimin...ildings#applicable-rates-and-allowance-period

 

[Deleted member 59730]

If we moved the structure would be taken down and sold for a nominal amount.....probably scrap as its highly unlikely anyone would want a 12x9M steel erection. We could build something more attractive and value adding BUT it will be a lot more then 35K plus VAT.

Don't discount what it could be worth to someone else. There is a big swing to home working and houses with workspace are at a premium. I am looking at a doubling of value of my work outbuilding since I've lived here. That is probably an extra £45.000 tax free.

 

[DWS]

https://www.gov.uk/guidance/claimin...ildings#applicable-rates-and-allowance-period

SBA unavailable if on the grounds of a residence

 

[bodgitt&scarperLTD]

Moving a thousand tonnes for a 108m2 steel framed building? Are you putting a basement in too??

I'd get some other quotes....