There are few better feelings than tapping away on your laptop in your garden office with the door open and the bees buzzing away among the lupins. Just be careful that the taxman isn’t also lurking in the shrubbery, waiting to take a slice of your capital or income.
Some business owners charge the cost of the garden office to the company as if it is a purely company-owned asset. Other people continue to treat it as though it is a part of their private house but they offset some of the running costs against the income from the business. It all depends on whether you are employed or self-employed, and whether you trade through a limited company or not.
The tax minefield
If you start charging your own business to occupy part of your garden then the taxman can say that it is no longer a tax-free entity in the way that your house is. The Inland Revenue doesn’t like arrangements where an asset paid for by the company is actually being enjoyed by you in your private time – http://www.accountingweb.co.uk/any-answers/capital-allowances-on-garden-office-pm. And that’s not all. If you are running a business from the garden you are going to find that the council will take an interest in whether you are allowed to do so and that will depend very much on the type of business. If you did not get planning permission for the office or check that planning permission was not required, you would be well advised to do so retrospectively.
Avoid business rates
You don’t want the council turning up and insisting on charging you business rates on what was previously your rose bed. An accountant will be the best person to sort out the dividing line between your personal living space and your office in the garden, and between your personal living expenses and the legitimate expenses of the business. So enjoy the peace and enjoy working in your garden but just make sure you get some proper professional advice http://www.gardenspaces.co.uk/ on your office room, so that you don’t fall into any of the bear traps that are the result of our extremely complicated national and local tax regimes.
On the plus side, an attractive and legitimate garden office is a fantastic attraction for a buyer when you come to sell your house.