Garden Office Self Build VAT

[R O Clarke]

Hi Everyone

my son Has built an office in his garden at a cost of £10,000.

he is not self employed or a limited company.

can he claim the VAT back that he has paid for materials?

[G and J]

I do not believe so.  Sorry. 

[joe90]

The VAT reclaim is for building houses unless your VAT registered fir your business as far as I know.

[Redbeard]

I think the only 'perk' would be that if he did go self-employed in future there is a small income tax offset allowed for use of home as office. I think the top rate (it's based on how many hours you use it) is £312 p.a.

[R O Clarke]

Thanks Guys,you have confirmed my thoughts.

[andyscotland]

23 hours ago, joe90 said:

The VAT reclaim is for building houses unless your VAT registered fir your business as far as I know.

 

@joe90 is correct that the special self-build VAT reclaim is only for standalone homes - it wouldn't cover a garden office or any property that can't be sold as a separate home (e.g. it wouldn't cover a "granny flat" in the garden either).

 

If it was for a VAT registered business it might be possible to claim the VAT on the VAT return if the building was built entirely for business purposes, and will be used entirely for business purposes for a long period (10 years, I think). However this would require clear evidence and might also mean there is Capital Gains Tax to pay if/when the house is eventually sold. There are many pros, cons and complexities so this should all be discussed with an accountant.

 

17 hours ago, Redbeard said:

I think the only 'perk' would be that if he did go self-employed in future there is a small income tax offset allowed for use of home as office. I think the top rate (it's based on how many hours you use it) is £312 p.a.

 

Technically, there is no top rate if you can demonstrate a reasonable calculation from shares of the utility bills and similar costs according to the portion of time used for business. However if you claim more than the HMRC flat rates (which they offer as a concession to simplify life for taxpayers and themselves) you can expect them to be interested in how you got your figures.

 

It's not often worth going above their rates as by the time you have the hassle of calculating a fair figure you probably won't make much.

 

However for a garden office it might be if t was used almost exclusively for business (but make sure you show some private/domestic use to avoid Capital Gains Tax) and e.g. has standalone electric heating that you can easily get a usage figure for.