FAQs

Garden Offices and Tax Advantages

 

What are the personal tax implications of a garden office?	Am I able to recover the 20% VAT on my garden office purchase?
Can I offset my garden office against corporation tax?	How does a garden office help protect me from Capital Gains Tax on the sale of my home?
Is a garden office liable for business rates?

PLEASE NOTE: ALL ADVICE GIVEN IN THIS SECTION IS OFFERED IN GOOD FAITH. SMART OFFICES LIMITED CAN OFFER NO GUARANTEE AS TO THE ACCURACY OF THIS INFORMATION. EACH INDIVIDUALS CIRCUMSTANCES VARY, YOU MUST TAKE PROFESSIONAL ADVICE FROM YOUR ACCOUNTANT OR LEGAL REPRESENTATIVE.  REFERENCES TO GARDEN OFFICES ARE APPROPRIATE TO SMART GARDEN OFFICE BUILDINGS ONLY AND BEAR NO RELATION TO ANY OTHER BUILDINGS FROM OTHER MANUFACTURERS THAT ARE UNLIKELY TO HAVE THE SAME STATUS.

What are the personal tax implications of a garden office to an individual?

As an individual or employee there are several tax advantages of a garden office that may be of significant benefit. Explore the option with your employer of a "salary sacrifice" arrangement which enables you employer to purchase your garden office on your behalf - and by sacrificing an element of your salary each month you will gradually pay off the loan to your employer.

Once this has been completed then ownership will revert to you. This is arrangement is popular with commuters who typically sacrifice the same sum each month as their previous rail season ticket. Your employer is content that you have a comfortable and professional workspace - without any additional cost to them. This set-up is only appropriate when the garden office in question is a fully movable item. Click here for more information about the movability of Smart Garden Offices. Of course, you MUST talk your accountant in relation to your own circumstances.  In the meantime though, click here to get a lovely Smart catalogue.

Can I recover VAT on my garden office purchase?

Yes, if you are purchasing your garden office as a fully registered VAT entity then you will be able to recover all the VAT associated with the purchase of your Smart Garden Office. If you are a flat rate VAT registered business then you will be able to recover the appropriate proportion.

Remember to speak to your accountant about your own circumstances, just to be sure. If you are not VAT registered, then VAT is not recoverable. Sorry, we hate it too.

Can I offset my garden office against corporation tax?

As a business, sometimes all the cost of your garden office can be offset against Corporation Tax, sometimes just some. It depends upon the nature of your business - and of course that important movability of your office.

Your Smart Garden Office is a fully movable building - so may be considered as an item of plant and machinery on your balance sheet. Therefore the purchase might qualify within your annual capital allowance. You really must speak to your account about this - and how he/she considers the nature of your business. If you are likely to want to move the building (that's no problem for us, by the way - click here to see why) in the course of your business then there is a good argument to say you'll qualify. Remember our caveat above though.

Even if you don't qualify for this relief in full, you may still get the tax relief on certain aspects of the building such as fittings, electrics etc etc. We'll detail these elements on your invoice so your accountant can pick them out. Click here to request our catalogue and remember to call your professional advisor; they'll enjoy the conversation. They are welcome to call us too - just to confirm that rather important aspect of movability.

How can a garden office help protect me from CGT on the sale of my home?

This matter became a major issue amongst homebased workers in the early 2000s.

Reportedly, there was a tax case against an individual home-based worker who had been charging her employer for the use of her home office. This wasn't (and still isn't) a remarkable issue, however it was reported that the Inland Revenue (as it was then) considered that by doing so she had changed a proportion of her domestic home into a commercial premises. Therefore, when she came to sell her home then CGT became payable on the proportion of that was considered "commercial". Even the Court considered this to be rather unjust and threw taxman's claim out - but it was an unpleasant experience for the defendant all the same. However, had she purchased a garden office (as a separate element to her domestic home) she could have made her running cost claims without fear of tax reprisals.

A proper, movable garden office, after all, can be financially ring fenced to be separate from the main domestic residence. Of course, you should speak to your accountant or local tax office to establish the relevant matters with your own situation. You've done well to have got this far - treat yourself to a Smart Garden Offices catalogue by clicking here  

Is my garden office liable for business rates?

Generally, no, your garden office will not make you liable for business rates. Whilst every Local Authority differs (so you should check with them directly, if you wish) the general answer here is that if you are "working from home" and there is no significant "commercial activity" then, much like planning permission guidelines, this is considered to be incidental to the enjoyment of the main "dwelling house".

However, do be aware that Local Authorities (and, often, neighbours) are sensitive to increases in traffic levels and associated nuisance - so a garden office may not be suitable if you are planning to "go retail" in a residential area.     

PLEASE NOTE: ALL ADVICE GIVEN IN THIS SECTION IS OFFERED IN GOOD FAITH. SMART OFFICES LIMITED CAN OFFER NO GUARANTEE AS TO THE ACCURACY OF THIS INFORMATION. EACH INDIVIDUALS CIRCUMSTANCES VARY, YOU MUST TAKE PROFESSIONAL ADVICE FROM YOUR ACCOUNTANT OR LEGAL REPRESENTATIVE.  REFERENCES TO GARDEN OFFICES ARE APPROPRIATE TO SMART GARDEN OFFICE BUILDINGS ONLY AND BEAR NO RELATION TO ANY OTHER BUILDINGS FROM OTHER MANUFACTURERS THAT ARE UNLIKELY TO HAVE THE SAME STATUS.