Garden Office Blog

Claiming tax relief on your Decorated Shed

By Steven Willis on 15th December, 2009

Purchase a Decorated Shed garden building and your business may be able to claim 100% tax deduction against profits 

If for instance the cost of your new Decorated Shed is £20,000, the following calculations would apply; 

Incorporated Business (Limited Companies)
Tax saving of £4,200 (£20,000 x 21% Corporation Tax), effective cost of office being £15,800. 

Unincorporated Business (Sole traderships & Partnerships)
Tax saving of £5,600 (£20,000 x 28% Income Tax & NIC), effective cost of office being £14,400. 

Please seek advice from your accountant or financial advisor to ensure your business qualifies. 

The situation regarding VAT is just as beneficial - if you are eligible to claim VAT back you can complete the relevant form online, and if you aren't eligible to claim VAT back you can claim 100% tax deduction on the total amount paid. 

The new capital allowances rules came into effect from April 2008 which allows small businesses a 100% deduction for the cost of plant and equipment used in a business on expenditure of up to £50,000 in one year. This is called the annual investment allowance (AIA). Decorated Shed buildings come under the criteria for AIA. The AIA will also reduce your profits for tax credit purposes and could increase your claim, so notify the tax credits of your reduced income. 

Amounts purchased in excess of £50,000 will qualify for a 20% tax deduction against business profits. This is called capital allowances.


Category:  Company Updates

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