Tax Implications Of An Insulated Garden Room

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From journalists and novelists to architects and sound engineers – there are numerous careers where it’s perfectly possible to work from home in a garden office building. And we should know, for here at Cabin Master we’ve been providing work from home options in the form of bespoke wooden garden office buildings for a number of years now.

Of course, you don’t need us to tell you about the increasing numbers of individuals choosing to work from home these days. Whether they are self-employed, juggling family commitments or simply prefer not to make the commute into work a few days a week – there has certainly been a huge shift in attitudes from both genders.

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Reclaiming VAT for your garden office building

Some work from home employees regard their garden office building as a company asset. This means that, provided you are VAT registered as a sole trader, partnership or limited company, it’s possible to reclaim VAT on the actual insulated garden room itself, as well as the cost of its installation and for the fittings. You can’t claim an office as capital allowance against corporation (company) tax.

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However, if you’re using your garden business room as a workshop e.g for jewellery making, pottery etc, then you may be able to claim for it from your capital allowance, as well as the cost of fixtures and fittings and how much it was to install them. That means also being able to claim for such items as heating, electrics and water.

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Charging your wooden garden office building ‘rent’

Meanwhile there is another way to claim for your wooden office garden building against tax and that’s by regarding it as part of your home and charging it ‘rental income’.  This includes being able to charge against the interest on a loan for purchasing the wooden garden room building in the first place.

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What happens with tax if you are a home-based employee?

If you’re a company employee rather than a self-employed individual working for yourself and you work from home in your insulated garden room several days a week, then it’s possible your company will pay you ‘rent’ (since you’re not using their electricity, water, general facilities etc but your own). And yes, initially this can seem too good to be true – not only do you get to work from home but they pay you for it! However, home working always results in increased utility usage and you’ll soon see the difference in your bills.

Some companies have been known to offer an interest free loan to employees so that they can buy their own garden office. Better still, there’s no tax implications for the employee on a ‘beneficial loan’ of up to £5000 a year.

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Checking with your accountant

Of course, if the reason for your wooden garden building is work-related then it’s worth checking all of the above with your accountant or a qualified business adviser (since HMRC rules and what you can claim for are never static), but the above should certainly give you some sort of idea of the tax benefits of having your own insulated garden office.

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Ready to create your own bespoke garden office building?

If you’re about to work from home more regularly or have been doing so for a number of years now and know that a separate insulated garden room would make your life 100 times easier, then now may be the time to take the plunge and order one. What are you waiting for?

To have a no-obligation chat about whether a garden office would indeed be the right move then one of our team will be happy to come out to your home to meet with you. Just call us on 0115 932 8888 or message us through our website. For inspiration you can also download our free e-book The Ultimate Guide to Garden Rooms here. 

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