Repairs to building

[RSmith2.]

Small limited company with a garage at home for tools and materials storage. The original door needs replacing as it's an old clunky overhead door that keeps getting stuck and doesn't offer any thermal properties. Looking to replace this with an electrical door (cost around £1500). Struggling to determine whether this is an allowable expense or whether it comes under capital. It will not change the use of the space but the new door would be an upgrade on the existing door.

 

[DWS]

Small limited company with a garage at home for tools and materials storage. The original door needs replacing as it's an old clunky overhead door that keeps getting stuck and doesn't offer any thermal properties. Looking to replace this with an electrical door (cost around £1500). Struggling to determine whether this is an allowable expense or whether it comes under capital. It will not change the use of the space but the new door would be an upgrade on the existing door.

Does the Ltd Company own the garage or lease/rent it?

 

[RSmith2.]

Does the Ltd Company own the garage or lease/rent it?

We work from home and the garage is on our property - which is owned personally by me and my partner who are the company directors.

 

[DWS]

We work from home and the garage is on our property - which is owned personally by me and my partner who are the company directors.

So is the garage used entirely by the Company or does it have private use?
How has it been treated within the Company accounts previously, as in paying you rent?

 

[DontAsk]

I would consider this to be an improvement (manual -> electric door) and, as such, not allowable https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim46915

 

[MyAccountantOnline]

Small limited company with a garage at home for tools and materials storage. The original door needs replacing as it's an old clunky overhead door that keeps getting stuck and doesn't offer any thermal properties. Looking to replace this with an electrical door (cost around £1500). Struggling to determine whether this is an allowable expense or whether it comes under capital. It will not change the use of the space but the new door would be an upgrade on the existing door.

Determining whether expenditure is a repair or an improvement for tax purposes isn't always straightforward but with the limited information as you are replacing the door and upgrading it with an electrical one, that would normally be capital.

However before looking at that you need to ascertain if any tax relief can actually be claimed at all, hence the questions raised by DWS.

 

[RSmith2.]

So is the garage used entirely by the Company or does it have private use?
How has it been treated within the Company accounts previously, as in paying you rent?

Used entirely by the company. We've only been setup a few months and a lease/rent isn't something we've setup as yet.

 

[JEREMY HAWKE]

I have a workshop here that I use to look after my old cars In the past it We used it for van maintenance when vehicles where fixable with a socket set .

It is very difficult to make the argument that a residential garage is solely used by the company and trying to gain tax advantages from that building

 

[fisicx]

Used entirely by the company. We've only been setup a few months and a lease/rent isn't something we've setup as yet.

But it's a residential garage. HMRC might give you a bit of a break as you use it for storage but replacing the door is something the owner does not the business.

 

[UK Contractor Accountant]

Get the invoice for the works to replace the door made out to the company. The cost will be a tax allowable expense for the company.

The full cost Inc vat will need to be declared as a taxable benefit in kind to HMRC on form P11D at the end of the tax year.

You will then need to make an employment expense claim on your tax return for busines use of your garage & home.

 

[DWS]

Used entirely by the company. We've only been setup a few months and a lease/rent isn't something we've setup as yet.

My opinion, neither Capital or Revenue but a home improvement, the Company can pay for it but the cost would be taken to the DLA.
Also look at the 100% business use as this may have an adverse effect on your PPR if the house is sold.
And consider, business rates, insurance and mortgage if running a business from home.

 

[pentel]

Also look at the 100% business use as this may have an adverse effect on your PPR if the house is sold.
And consider, business rates, insurance and mortgage if running a business from home

This!!! It's probably not worth it for the complications it introduces.