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Can I claim for an office in the garden? What you need to know!

We are often asked about the tax consequences of building a garden office or outbuilding from which work can be carried out.

As an alternative to converting a garage or loft to use as a home office, ready made garden structures are becoming trendy and popular. There are a number of factors to consider including the tax consequences.

Whether you buy a ready built building or build one yourself the tax consequences are exactly the same.

Tax deductions for the building  X

A garden building, whilst being a movable item, is considered a structure from which your business operates by HMRC and therefore the cost of the building is not allowable against business profits. This disallowance goes as far as the design and planning of the structure as well as the initial decoration.

Fittings √

But…. the good news is that normal tax rules apply to the cost of furniture, (curtains, desks, chairs, shelves etc) which you add to the structure. This means a deduction for capital allowances including annual investment allowances can be claimed for these items. Thermal insulation fitted or built into the structure, whilst being part of the initial structure also qualifies for Capital allowances.

Running costs √

The cost of heating and lighting the office is tax deductible, as is the supply of water if it’s separately metered from your home. Repairs, including redecoration costs, are also tax deductible.


The VAT rules regarding garden buildings differ from those for income tax and corporation tax and the good news is that VAT can be reclaimed on not just the running expenses, but also the cost of your garden building if it is used for business purposes.

Selling the office √

There is not likely to be a tax problem when you sell the office, either by itself or with your home, as it will probably be worth less than the cost of the structure meaning there will not be a profit or gain. Even if it is worth more any gain is most likely to be exempt from capital gains tax.


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