Driveway extension tax deductible?
Discussion
Morning all, I'm not sure if this is the right section or not but here goes. I've got a (very) small private hire ltd company where my home address is my operating centre. I've just bought a second vehicle, but I'm slightly stuck for parking so I'm thinking about extending my driveway slightly to accommodate the second car.
I'm sure the answer is probably 'no', and I'll ask my accountant at some point but I wonder if this extension could be tax deductible on the basis that if I didn't have the additional car I wouldn't need to extend my drive, or have I gone mental?
I'm sure the answer is probably 'no', and I'll ask my accountant at some point but I wonder if this extension could be tax deductible on the basis that if I didn't have the additional car I wouldn't need to extend my drive, or have I gone mental?
It's a capital cost (extension rather than repair) so if it was a genuine business cost it would be treated as an addition to Fixed Assets and not written off as a cost in the business profit and loss account.
Certain types of "Additions to Fixed Assets" are eligible for tax relief using Capital Allowances. However, as a drive extension would be "land and buildings" related, it would not be eligible for any Capital Allowances so even if a bona fide business cost would not attract tax relief.
Also, there is the possibility that it could cause problems later when selling your home as it could compromise the normal exemption from Capital Gains Tax that the sale of your Main Residence usually attracts.
Certain types of "Additions to Fixed Assets" are eligible for tax relief using Capital Allowances. However, as a drive extension would be "land and buildings" related, it would not be eligible for any Capital Allowances so even if a bona fide business cost would not attract tax relief.
Also, there is the possibility that it could cause problems later when selling your home as it could compromise the normal exemption from Capital Gains Tax that the sale of your Main Residence usually attracts.
What is the state of your director's loan account with the company? If the company owes you money, you could use company funds to pay for the extension and offset the expenditure against what the company owes you.
The company can't make any tax claims for the expenditure but at least then you could use the company to pay for the project without you suffering any personal Income Tax or NI on having to extract money from the company to yourself personally.
The company can't make any tax claims for the expenditure but at least then you could use the company to pay for the project without you suffering any personal Income Tax or NI on having to extract money from the company to yourself personally.
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