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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4948
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I am about to commission the build of a workshop and

Customer Question

I am about to commission the build of a workshop and office beside my home from which my Ltd company will operate. The total cost will be circa £150K +VAT.
The workshop will be cavity brick wall with tiled roof, central heating, running water, sewage etc.
What, if any, of the costs are tax deductible?
Also, can I claim back the VAT?
Best regards
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello Ian, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
This form of expenditure is covered by the Capital Allowance regime. For the 15/16 tax year and a capital buildings spend of 150K then there is an Initial Investment Allowance of 100%, but only until 31 December 2015 so you may have to lean on your builders. Otherwise the entitlement would be to a Writing Down Allowance of 8% every year on a decreasing balance basis.
These sums can be used to offset your profits for the relevant year.
Yes, you can claim back the VAT assuming that the company is registered for the tax..
I do hope that I have been able to bring you some good news.
Customer: replied 2 years ago.

HMRC tell me that this regime was stopped in 2008.If you have information to suggest it is still a valid strategy please could yo send me information? Thanks

Expert:  bigduckontax replied 2 years ago.

Well, yes and no; although the regime substantially changed in the 08/09 tax year it did not actually run off until April 2011. Furthermore i have mislead you and you cannot claim capital allowances for buildings, only the plant and machinery built into or installed therein.

My deepest apologies for misleading you on this question. I have at last run down the data from which I derived my information; unfortunately I misread the document. However the 31 December limitation does apply to plant and machinery acquired under the temporary measure AIA increase to 500K, so again if you are approaching this then time is still of the essence.