Tax implications of a garden office

Tax implications of building a garden office on the company and director A garden office is a popular alternative to converting home space into a home office.

Whether the garden office is built before you move in or is built yourself after you move in, the tax implications are the same.

The building

The building for a garden office is not an allowable expense against profits as it would be a place in which business takes place. The initial set-up of the office and the structure is also not allowable.

Operating Costs

The costs incurred while working in the office is allowable and therefore is liable to tax deductions. This includes maintenance of the building. This does not include the initial process of building and decorating as this is disallowable.

Fixtures and Fittings

Fixtures and fittings follow the same tax rules as they normally would. This means that moveable furniture within the structure qualifies for capital allowance deductions such as annual investment allowances.


VAT can be reclaimed on the running expenses and the building expenses as it would be used for business purposes. This can allow for up to 20% of the costs to be reclaimed, ultimately reducing cost to set up a home office.


If the garden office is paid for by the company for an employee, the employee may have to pay a BIK charge. This is because the company would be paying a personal expense and that is then treated as BIK received from the company.

Other issues to consider:

This is likely to increase and would be worth going over the plans with your insurance company before executing it.

Planning permission

In certain circumstances planning permission would be required to build a garden office. It may be useful to do some research before incurring any expenses as planning permission can be denied.

Capital gains tax

If you were to build the office and sell the office or house with the office in the future, you would be subject to CGT on any gains made on the building.

Please get in contact if you would like help sorting your Garden office tax. Book a free discovery call with us today.

Daniel Johnson
Benjamin Franklin

Beware of little expenses; a small leak will sink a great ship.

Benjamin Franklin