YAWA - Can my company pay for my loft conversion?

You ask:

Can my company pay for my loft conversion?

We Answer:

If the office is going to be a space dedicated purely to your company's activities (bear in mind, you'll need a solid justification for this if HMRC comes knocking), then your company can foot the bill for everything from the drawing board to the final touches of your home office setup.

However, it's not all a straight shot from expense to tax deduction; only the costs for the bits and bobs like insulation, wiring, blinds, and office furniture will nibble away at your corporation tax.

The bulkier expenses, those tied up in the conversion process itself, including the planning and building bits, are chalked up as capital spend on a slice of commercial real estate, sitting snug in your company's books as an asset until it's time to sell, and only then might they shave a bit off your corporation tax, and that's if there's a profit from flipping the office space.

Make sure every invoice is in your company's name, not yours, to claim back every penny of VAT on the expenses, hinging on the fact that the office is strictly for business dealings.

And don't forget to dot your i's and cross your t's on stuff like business insurance and rates for the 'commercial property' bit of your home, plus keep a wary eye on the potential for a capital gains headache when you decide to sell your home, what with the office being a business-only zone.