By Kris Draft

The question I get all the time is “Can I claim a home office as a tax write off” and the short answer is “No” – not really; but there are some things you can do. Here we will discuss correct and legal methods of tax minimisation when buying a Garden Igloo or building a home office.  

Business Ownership:

• • • A home office is deemed a chattel if it is moveable; a Garden Igloo is deemed a chattel because you can move it from one address to another. A home office built in situ is seemed a “fixture”; so if a home office is built on your land; and is unmoveable it is deemed to be in personal ownership; ownership of the house. You cannot claim a traditional Garden Room as necessary to your work.

    • Some people have attempted to register a business from this address and rent the space back to themselves, this is classed as hiding an asset and is a reportable tax fraud. Further this method takes a lot of work registering a new address to the “Garden Room” – and then applying for change of use from a residential usage, to a business use, and this method only really works if business rates are lower than your tax liability. Don’t do this.

    • A Garden Igloo however is not an asset as it is not a “fixture” – but a “chattel”.  So can reasonably and legally be deemed not in the personal ownership of yourself, but in the ownership of a company. We designed the Garden Igloo so you can move it from one employees address to another – designed with employee retention in mind.

    • You can  always claim a portion of running costs of a garden office if you are using it for business purposes – and you don’t need to pay business rates as the land it sits on is still residential land and is taxed by your council tax. Running Costs; (apart from council tax) include electricity, cleaning products, and servicing interest; so will be best off buying the igloo through a business; having the business own the igloo; and then lending the igloo to yourself and your staff; you can claim this as a necessary business cost because essentially it is the same as claiming renting office space as an ongoing business expense.

• • Note;  You can’t claim capital allowances on the cost of building the office as  CA excluded “buildings and structure” from qualifying assets; However an igloo is an “integral feature” or “equipment” – there is no essential difference between a Garden Igloo and a Coolbox or Thermos Flask; just scale.  If you are building a traditional Garden Room, your tax liability will look something like this; “The structure is £15,000” – not a capital allowance; and your electrical and heating and lighting, printers and computers are £5,000 – and are counted towards your capital allowance. A Garden Igloo will be £500 for a concrete pad (not part of your capital allowances) and then £2000 of non-permanent chattel on top of it; (is part of your capital allowances).

• Personal Ownership:

  • We understand that you might be buying the igloo for yourself, and unable to convince your employer to own the igloo:

    • If you have been explicitly asked to work from home as part of your contract with your employer you can apply for Work From Home Tax Relief.

  • This means that your Home Office is part of your ongoing work expenses, expenses you would not normally need to pay for yourself. The flat rate for this is only £6 when no receipts have been provided. You can provide receipts for heating, lighting, internet usage, desks, chairs printers etc. This percentage is calculated by the amount of space the garden room takes up of your home; so it does make sense in getting the largest Garden Igloo you can get in your Permitted Development zone. For example if you 3 up 3 down house is 90m2; and your Garden is 20m2 you can buy a 10m2 igloo; and this means 10% of your running costs of your home can be claimed against your tax liability. As your igloo is part of your running costs; the original purchase, of £5,000 means you can claims £500 off your tax liability. Further if you require maintenance of  £500 then £50 of that is written off too.