store for business VAT ??

[Jon H]

Hi 

 

I have tried to find a post that deals with this but failed so sorry if ive missed this, My wife works from home doing medical legal reports (she is a GP) after every report she has to store her files for 10 yrs or so by law, these are building up alarmingly so my plan is to build a store in our garden solely for this purpose (we have got advice from planning that its a permitted development) i'm going to do this myself as a SIPS garden room type project.

 

My wife is VAT registered for her work and i wondered what the VAT position is for this do i buy the materials and claim the VAT as we do for paper and toner etc or can i buy material with no VAT and i guess the building costs  are legitimate expenses and can i claim for my time as DIY builder ?? - i realise I maybe should be posting this on a tax forum maybe but wondered if anyone had experience of this 

[PeterW]

I would check if there is not a better route such as using a secured storage provider (not a storage unit..!) as the data she has is very much classified as sensitive personal data under GDPR, and should be stored under the guidance from the ICO. Does she need to keep physical copies or are electronic copies not acceptable. 
 

The costs of building the store would be a business expense - she can claim the VAT back through the business plus the cost of the building but it would need to be registered as a fixed asset on her accounts. You would also need to ensure her business insurance covered it as your household insurance would be unlikely to cover the building and contents. 

[Jon H]

Thanks for a very quick response  very helpful - the files are currently stored in a barn with big high security locks and solid stone walls with no openings good security  and she is indeed registered with ICO and this is compliant,  we did have the files stored before externally at a unit  but now we are in the middle of nowhere in Cornwall there is nothing  locally she often needs to refer to the records as cases progress so needs access.  

 

the new store will not have any windows just some ventilation and made from SIPS panels with wooden cladding and a strong door and security locks and thus will meet the ICO guidance - she has special bespoke  insurance for the records as you are correct not covered by our house insurance.

 

Increasingly the data is electronic but a lot of NHS records are still paper only sadly particularly the hospital records 

[Dave Jones]

buy a scanner and a shredder.

[Jon H]

So we have about 100+ cases 7 full large box files for each would take longer than building the building and less fun. also the beauty of sips building is once we can shred all these in 5-10 years then we can then cut a few holds for windows/doors and convert it into a garden room gym etc is in the top corner of the plot has great views. I guess it might be a building asset and will need to pay VAT back or something at this point. 

[newhome]

1 hour ago, Jon H said:

is once we can shred all these in 5-10 years then we can then cut a few holds for windows/doors and convert it into a garden room gym etc is in the top corner of the plot

Won’t you have amassed even more by then? 
 

[laurenco]

If you can, build it as a business expense and claim the VAT through her company, then you don't need to provide evidence of it being a new build to the various labourers (who may or may not accept it as a new build) and most importantly you avoid having to lay out the VAT and wait 6 months for a rebate. We submitted our DIY VAT reclaim in Oct,  it was acknowledged within a fortnight, then we chased them this week, and they said they our file probably wouldn't be put on anyone's desk until March or April.

[Temp]

I'm not up to date on this but..  If your wife's business builds and owns the outbuilding there might be CGT implications later on if you sell the house? Think same applies if she claims a room in the house is an office? or has Covid caused the rules to change?

 

Here it also suggests business rates might be an issue..

 

https://www.brooksonone.co.uk/knowledge-centre/limited-company/claiming-business-expenses/working-from-home/#:~:text=Claiming expenses when working from,as a tax-deductible expense.&text=In order to claim tax,an office or a workplace.

 

If you make it clear that part of your home is dedicated for business use it may attract the attention of the local authority Valuation Office who could look to apply business rates. If the space is for "mixed use", personal as well as business use, then business rates should not be applied.

 

Usually your home is exempt from Capital Gains Tax when you sell it. If you sell your house having claimed that a proportion of it has been used for business purposes, HMRC may argue that a proportion of any gain should be subject to Capital Gains Tax. As with business rates, this should not apply if the room you use has mixed use, but could apply if you've created a dedicated office, for example, above your garage.