What is tax treatment of a mobile office?

What is the tax treatment of a bespoke Office trailer on Wheels for a Ltd Co and its user?

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The trailer is new bespoke moveable and kitted out as an office complete with solar panels, batteries, woodburner for heat, aircon, starling for internet, desk , seating, lighting, computer, printer etc. As such it is totally off grid and can be located anywhere without connection to any services. It will be used by a consultant who operates through his own ltd company.  They plan to locate it  on different spots during the year on the small farm that is their PPR. It will be used exclusively as an office for their Ltd Co consultancy work and for no personal purpose. The layout of the trailer clearly reflects this.

I assume that the  company can claim the VAT. It's not a building connected to any services. Can it qualify for claim of a 100% deduction capital allowance?

How likely are the HMRC to insist there is a BIK given its clear exclusive purpose?

As it is mobile, and will not be fixed to the land it will remain owned by the limited company. If the farm is ever sold, the trailer would remain an asset of the company and it would not be part of the farm sale.  Presumably this cannot therefore impact any PPR relief?

 

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By I'msorryIhaven'taclue
03rd Feb 2024 12:12

ChrisBurr wrote:

It will be used exclusively as an office for their Ltd Co consultancy work and for no personal purpose. The layout of the trailer clearly reflects this.

I assume that the  company can claim the VAT. It's not a building connected to any services. Can it qualify for claim of a 100% deduction capital allowance?

I think you're on thin ice claiming CAs on a main office, even if it is "portable".

On top of which, you're not really moving it from site to "site" - you're just moving it around the same "site". Come to that, a residential site to boot.

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DougScott
By Dougscott
03rd Feb 2024 12:15

I don't see why the company couldn't claim VAT. I don't think it can claim any capital allowance on the building as it is not plant that is moved for the purposes of the trade (like a portacabin on building sites is). You should be able to claim AIA/capital allowances on the "fixtures and fittings" in the office - solar panels, wiring, furniture etc. HMRC won't be interested in charging a BIK if it is an office.

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By Tax Dragon
03rd Feb 2024 13:46

On the BIK point, if you don't fall into a specific charge then it's the catch-all charge (Ch10) that applies. And catch-all does catch all - read the chapter. What you need to get you out of that is an exemption. The office accommodation exemption is s316. Do check that it applies.

If this thing had an engine, floated or flew, you could fall foul of s316(5)(a). I guess there are flying offices (Airforce 1?) but I'm yet to come across someone caught out by that exclusion.

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Replying to Tax Dragon:
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By petercooperuk
05th Feb 2024 11:17

Tax Dragon wrote:

If this thing had an engine, floated or flew, you could fall foul of s316(5)(a). I guess there are flying offices (Airforce 1?) but I'm yet to come across someone caught out by that exclusion.

I don't know the tax rules around aircraft in particular, but if there were an Air Force One style giant car/van (treated as a car due to being unable to carry goods) it could arguably be considered a "pool car" with no BIKs due: it's used by multiple personnel, provided by reason of office, and not kept overnight at a residential premises.. ;-)

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VAT
By Jason Croke
03rd Feb 2024 17:05

Think you'll struggle to justify VAT reclaim. I think you emphasise too much that there will be zero personal use....how can you guarantee that is the case? If it was a fixed office in the garden or on farm site, then it'd be easier to argue business use but why must it be mobile?

Portable office can be taken anywhere, sounds like a fancy caravan and I dont see the purpose of an office kitted out to a fancy spec for it only to be 'moved around the farm', why does it need to move around the farm?

Call it what it is, a for personal use mobile holiday home and then work backwards from that position as to why it is only for a business purpose.

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Replying to Jason Croke:
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By FactChecker
03rd Feb 2024 17:25

"sounds like a fancy caravan" ... the image that came to my mind as I read through the list of accoutrements appended to it was more that of a garden shed that wanted to be a one-man-band (of the musical variety).

But "why must it be mobile?" feels like it pinpoints what's been going on.
Sounds like someone looked up all the potential routes to various exemptions, and then roped them all together in the hope that the result will take care of everything.

But tax doesn't work like that - as you, TD and others are pointing out.

[Tongue-in-cheek: won't H&S throw a hissy fit at an office with no toilet facility?]

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Replying to FactChecker:
DougScott
By Dougscott
03rd Feb 2024 17:34

The benefit of it being mobile is you can ....er...."do your business" in different places.

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Replying to Dougscott:
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By FactChecker
03rd Feb 2024 17:49

Ba Dum [***] ...
Oh fer crying outloud ... Ba-Dum-B u m

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Replying to Jason Croke:
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By I'msorryIhaven'taclue
04th Feb 2024 09:44

Jason Croke wrote:

Portable office can be taken anywhere, sounds like a fancy caravan and I dont see the purpose of an office kitted out to a fancy spec for it only to be 'moved around the farm', why does it need to move around the farm?

Because... ahem... " It allows the office to be located in various quiet pleasant locations that will help the user get plenty of work done away from the busy distractions of the farmhouse."

Ok, the real reason our protagonist will move it round the farm is (I suspect) that he wants the structure to be analogous to a portable builders' hut for P&M CA claim reasons: a builder's hut used as an office; moved round the site as development progresses; and (importantly) moved to another site when work on Site #1 is complete. I believe he's on thin ice shunting it round a farm, especially a single farm site.

I'm left wondering just what the "busy distractions of the farmhouse" might be... a menagerie of animals and small children, perhaps; a garrulous mother-in-law; Mr Ed wisecracking and horsing about! No wonder he wants to go sit quietly in his shepherd's hut!

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Replying to I'msorryIhaven'taclue:
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By DougScot
04th Feb 2024 09:54

It may be that the sheep rotate between fields and he likes to be close to his flock......

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Replying to DougScot:
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By I'msorryIhaven'taclue
04th Feb 2024 10:07

... because his staff is a crook?

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Replying to DougScot:
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By FactChecker
04th Feb 2024 13:05

If he's got rotating sheep then he's got bigger problems ... he should stop tying them to the windmill!

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Replying to I'msorryIhaven'taclue:
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By Leywood
04th Feb 2024 10:15

Bose headphones will help him.

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By ChrisBurr
03rd Feb 2024 23:39

Thanks for the comments. I believe the key motivation for having the office mobile is that, being readily moveable , it avoids need for any planning permission. To my mind it also avoids impact on PPR if the property is ever sold since it is no part of it. Its size makes it impractical as a ‘caravan’ to be regularly trailed on the road. ( Think large boxy modern style shepherd’s hut on a modern chassis!) It allows the office to be located in various quiet pleasant locations that will help the user get plenty of work done away from the busy distractions of the farmhouse. There is no doubt that it will be used exclusively for the consultant’s work.

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Replying to ChrisBurr:
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By I'msorryIhaven'taclue
04th Feb 2024 09:25

ChrisBurr wrote:

Thanks for the comments. I believe the key motivation for having the office mobile is that, being readily moveable , it avoids need for any planning permission.

I once erected a v. large shed in the garden (to use as an office), fixed because it was all wired in to electric, and didn't need planning permission.

ChrisBurr wrote:

To my mind it also avoids impact on PPR if the property is ever sold since it is no part of it.

Ok, if that matters.

ChrisBurr wrote:

Its size makes it impractical as a ‘caravan’ to be regularly trailed on the road. ( Think large boxy modern style shepherd’s hut on a modern chassis!) It allows the office to be located in various quiet pleasant locations...

Are there wheels on the chassis, or do you need a crane or hoist to relocate it?

ChrisBurr wrote:

...that will help the user get plenty of work done away from the busy distractions of the farmhouse. There is no doubt that it will be used exclusively for the consultant’s work.

Especially if he becomes a shepherd!

TD, is there an elephant in the room re: claiming CAs on an "office"? For consultants, that is. Not shepherds.

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Replying to I'msorryIhaven'taclue:
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By ChrisBurr
04th Feb 2024 10:25

Being SSSI makes planning permission necessary.

Thanks for all the comments. My reading of all this is probably to make no claim in the trailer structure, just claim on all the fixtures, fittings and contents.

Thanks.

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Replying to ChrisBurr:
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By More unearned luck
05th Feb 2024 11:19

Since your reading is that relief is not due on the structure, what is your justification for claiming relief on fixtures?

How are you going to apportion some of the purchase price between fittings and the contents that came with it (I'm assuming that you see the error of your ways regarding fixtures)?

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Replying to I'msorryIhaven'taclue:
paddle steamer
By DJKL
05th Feb 2024 12:34

"I once erected a v. large shed in the garden (to use as an office), fixed because it was all wired in to electric, and didn't need planning permission."

Whilst not v large I built one of these during covid. It has space for two chairs, a small table, an oil filled radiator, a CD player and a mini fridge, it has power and light and is where I go each evening to read and smoke a cigar or two- on cold nights I may also be accompanied by some whisky, just for company.

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Replying to DJKL:
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By spilly
05th Feb 2024 23:22

So that’s a chair for you, and then the second one must be for the companionable bottle of whisky to lounge in then.

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Replying to spilly:
paddle steamer
By DJKL
06th Feb 2024 08:56

My whisky tends to be a fair weather friend, around for a while and then no longer there. (Second chair is useful to put feet on)

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By Tax Dragon
06th Feb 2024 10:38

People talking about self-build...

It may be that the tax treatment is different if the company bought/buys a fully-packed Portakabin* on wheels, compared with a big empty caravan/trailer that it kits out.

Respondents have probably assumed one or the other, and responses need to be treated accordingly.

* Other brands are available.

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