My ltd co renting my garden room
Discussion
I have a garden room that is nearly ready. It'll be used as office space to run my ltd company
Am I allowed to charge my ltd co rent for this space? If so, how much?
The space is 30sqm and air conditioned with toilet and kitchenette. I know a home owner can have a lodger and not pay tax on something like £600 per month lodgings. Similar for ltd co?
Am I allowed to charge my ltd co rent for this space? If so, how much?
The space is 30sqm and air conditioned with toilet and kitchenette. I know a home owner can have a lodger and not pay tax on something like £600 per month lodgings. Similar for ltd co?
Of course the company can rent the garden room.
Obviously, you, as the landlord, will need to return the rental income received in your self assessment tax return and pay the relevant income tax arising.
You might also want to consider what disclosure notes might need to be shown in the company's formal accounts.
Obviously, you, as the landlord, will need to return the rental income received in your self assessment tax return and pay the relevant income tax arising.
You might also want to consider what disclosure notes might need to be shown in the company's formal accounts.
It's not always the best thing to do but I would certainly try and claim back for any furniture and equipment installed in the office. They should be eligible for capital allowances and maybe VAT reclaim (if your company is VAT registered).
Ongoing repairs and maintenance etc should also be claimable.
Ongoing repairs and maintenance etc should also be claimable.
Evanivitch said:
The council will be very interested in a "garden room" that has a kitchen and toilet if it didn't already have planning permission.
The building has planning permission. I'm not sure if planning is needed for toilet and kitchen but both were shown in the approved plans MrJuice said:
Evanivitch said:
The council will be very interested in a "garden room" that has a kitchen and toilet if it didn't already have planning permission.
The building has planning permission. I'm not sure if planning is needed for toilet and kitchen but both were shown in the approved plans MrJuice said:
Evanivitch said:
The council will be very interested in a "garden room" that has a kitchen and toilet if it didn't already have planning permission.
The building has planning permission. I'm not sure if planning is needed for toilet and kitchen but both were shown in the approved plans MrJuice said:
I don't think that's right
You can check with the architecture equivalent of EricMC who's called Equus
It's got planning permission so it's irrelevant to the thread, but permitted development doesn't allow "self contained" living accomodation. You can check with the architecture equivalent of EricMC who's called Equus
As I understood from previous threads on this, having plumbing and sanitation services to the building would raise the expectation that it could be used as accommodation.
I'm no expert on the matter and may have misunderstood previous threads.
smokey mow said:
For business use? Or only for use incidental to the dwelling?
Business use in my case would be to use as an office. I need privacy for my work so my house wouldn't always be suitable (if there are family/others around) I'm pretty sure I can have a shower, kitchen, TV in the garden room. No one will be sleeping there, so there's no issue. There's no direct access from the front of the house. You have to go through the house to get to the garden.
MrJuice said:
I have a garden room that is nearly ready. It'll be used as office space to run my ltd company
Am I allowed to charge my ltd co rent for this space? If so, how much?
The space is 30sqm and air conditioned with toilet and kitchenette. I know a home owner can have a lodger and not pay tax on something like £600 per month lodgings. Similar for ltd co?
You are allowed to charge your limited company rent for using the space in your garden room as an office. This is a common practice where business owners use part of their home for business purposes.Am I allowed to charge my ltd co rent for this space? If so, how much?
The space is 30sqm and air conditioned with toilet and kitchenette. I know a home owner can have a lodger and not pay tax on something like £600 per month lodgings. Similar for ltd co?
The rent charged should be a fair market rate, comparable to what you would pay for a similar space elsewhere. It's important that the rent isn't set excessively high just to move profits from the company to yourself
The rent you receive from your limited company will be considered as income and must be declared on your personal tax return. You may deduct certain expenses related to the rented space, such as a portion of your home's utility bills, property insurance, and maintenance costs.
Using part of your home exclusively for business can potentially affect the Private Residence Relief, which normally exempts your home from CGT when sold. However, if the office space is used only part-time for business and remains part of the home setting (not exclusively for business), CGT may not be affected.
The company can deduct the rent as a business expense, reducing its corporation tax liability.
The rent-a-room scheme, which allows homeowners to earn up to £7,500 per year tax-free from letting out furnished accommodation, typically does not apply to spaces used for running a business.
If you are VAT-registered, there could be implications regarding VAT on the rental charges.
Finally, set up a formal rental agreement between yourself and your limited company to document the arrangement.
Edited by paddy1970 on Saturday 2nd December 06:38
Does your wife or kids have lower personal tax liabilities than you?
Maybe you should consider renting it off one of them.
I'm not an accountant, but when I was running a Ltd company, I couldn't be arsed with that sort of thing.
Other tricks people play. Buying a motorbike through the Ltd company (its plant and equipment.
Leasing a cab Crew pick up as a pool car.
Buying office furniture that includes an antique drinks cabinet.
Just put the furniture through as expenditure, and meter the energy used. I put a second hand desk through off gumtree for £15. My accountant laughed at the screen shot of the advert, I provided as proof.
Maybe you should consider renting it off one of them.
I'm not an accountant, but when I was running a Ltd company, I couldn't be arsed with that sort of thing.
Other tricks people play. Buying a motorbike through the Ltd company (its plant and equipment.
Leasing a cab Crew pick up as a pool car.
Buying office furniture that includes an antique drinks cabinet.
Just put the furniture through as expenditure, and meter the energy used. I put a second hand desk through off gumtree for £15. My accountant laughed at the screen shot of the advert, I provided as proof.
There is already an established procedure to reclaiming costs of operating the business from home.
You count the rooms used for the business, you count the rooms available in the house, and divide one by the other. You can claim the resulting percentage of the house running costs from the business.
It's an expense of the business and no personal tax to pay.
You count the rooms used for the business, you count the rooms available in the house, and divide one by the other. You can claim the resulting percentage of the house running costs from the business.
It's an expense of the business and no personal tax to pay.
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