My Ltd company trades from my home address which is a rental property. The shed is required to store company owned equipment for which there is no room to store in the one room that I as the private tenant rent to the company. I believe that the shed being a static fixture needs to be dealt with as Capital Expenditure and not subject to any reliefs. However how about the building of the base on which to erect the building? In my case I actually have a liability as in the event of moving and taking the shed with me I will be required to make good the area back to its original state. It certainly isn’t an asset in practical terms but is there any grounds under which I can claim any allowances on this, either on the construction or at a later date if a deconstruction is required?
Thanks,
Will Hopkins
Replies (3)
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Probably not
The shed and its base is a building or similar structure, and will not qualify for allowances unless it's moveable and actually moved from time to time in the course of the trade. The fact that it can be moved in theory, is not sufficient to qualify for allowances.
Similarly the deconstruction is not eligible for capital allowances or as an allowable revenue expense.
It is not relevant that the company trades from your home address, the rules would be the same for any company operating from its own premises.
Making good
Sorry, maybe I missed the making good point. When a company exits a lease and is responsible for making good a property back (i.e. dilapidations), they are only allowable if the dilapidations consist of normally allowable costs, e.g. redecorating. Demolition and construction costs are not allowable even if they form part of dilapidation costs, as they relate to the building itself and are therefore capital in nature. I believe the making good of the shed would be the same - it would relate to the shed, which is capital.
I would not have expected a BIK as there is no personal benefit from the shed or moving the shed..? But it's not my specialism.