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Sam, Accountant
Category: Tax
Satisfied Customers: 14155
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I am self employed and run my business from home We are having

Customer Question

I am self employed and run my business from home
We are having a large extension to the house and part of this is creating a new office
Can I reclaim any of the costs or the vat or offset any costs against my business or its tax bill?
Submitted: 4 years ago.
Category: Tax
Expert:  Sam replied 4 years ago.



Thanks for your question

For Tax purposes, these costs can only be offset against the capital gain that will arise if and when you sell the property (as an element of your house sale will trigger capital gains as you have used some of to run a business) so I am afraid the build itself, and any associated costs cannot be claimed against the trade income for tax purposes.

But you can claim the VAT on these costs as long as the sole purpose of the extension and build is for business purposes only (if there is some private element, then you will need to apportion the VAT reclaimed to reflect this)


So whilst these costs cannot be claimed against your self employment trade income for income tax purposes, note that purchases such as office furniture, and other office equipment/business equipment, can be claimed against the profits.

(And of course the VAT suffered here too can be claimed)


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