An office at home

I am often asked about setting up an office at home and what costs can be claimed through the business. Many of us will work from home even if we have an office, myself included. So, over the next few weeks I’m going to explore the tax implications of working from home and what can and can’t be included! Today we will look at converting some of your home into an office.

The main building costs of any conversion at home, whether that be a loft or another room, will be treated as capital expenditure on your personal residence, so you won’t be able to put any of these costs through your business.

Your personal property will be owned by you personally, rather than being owned by your company, so the conversion work could not be treated as a business capital expense. Even if your property was owned by your company the conversion costs are going to be mainly of a capital nature which means that they are typically not eligible for tax relief. What I’m saying in plain terms is that the money spent on conversion CAN’T BE INCLUDED FOR TAX PURPOSES however you do it.

So, if you are considering converting any area there will be some specific expenses related to your new office that you can put through your company if they are 100% for your business office, these will typically include:

  • Office furniture – desks, chairs, lights, phones
  • Computer equipment
  • Shelving & storage
  • Carpet

To be safe make sure any of these items are invoiced to your company. If, for example, you are installing carpet in the whole area, you will need to ask the carpet provider to raise two invoices – one invoice addressed to your company for the element related to your new office and one addressed to you personally for the rest of the work.
It is a minefield which is why it is so important that you consult a professional when you consider setting up an office at home. Please do contact us is you have any questions.
Next week I will look at what expenses you can claim when you work from home…