Home Office - VAT

GSRNBP

If I'm building a dedicated home office in my attic from which I will be working (I'm a sole trader solicitor) but I will not be seeing clients there (I use an office - not my own) in town for that, I'm assuming this is a "business expense" for the purposes of VAT, would I be correct on that or am I missing something?

CIARAN_BOYLE

Seek professional advice.

Any construction work is likely to be considered improving your residential property and not vat claimable business expense.

Fitting out your office would be a business expense.

El Grifo

Creating something not already there may be considered "enhancement expenditure", i.e. adding to the property value. And in that case, whether it be a business or residential property, it would be an addition to be allowed on any future disposal and potential CGT. Be aware that converting to business use part of one's residence may have implications for CGT PPR relief on any disposal.

The office fit out, once it meets the "wholly and exclusively for the purposes of the trade profession or vocation" would be allowable for VAT and also Capital Allowances (CA @ 12.5%pa)

I'd suggest a chat with your accountant to make sure it's clear.

Calahonda52

OP: is the house a two storey or 3 storey when the attic is converted?
You may run into habitable space issues as per building regs and if the construction is deemed to be in breach of building regs I don't think you can be expensing the construction bit.
In any event I agree with earlier comment that you are adding value to the house, not constructing a home office.

The more you claim for home office etc, the more lightly a Revenue inspection of some sort: i.e. if it is deemed aggressive by their algorithms.

GSRNBP

3 storey - half the attic is already converted. I'm meeting my accountant next week, but I wanted to get a rough idea in my own head of what points I should be aware of / considering.

Not the end of the world if it can't be claimed back on VAT (etc.) and will still go ahead with it, but trying to ensure I'm not leaving money on the table where I could legally and correctly be claiming for it!

Thanks all for replies.

CIARAN_BOYLE

remember the hri scheme is essentially claiming vat against your income tax bill.

Calahonda52

GSRNBP wrote: »

3 storey - half the attic is already converted. I'm meeting my accountant next week, but I wanted to get a rough idea in my own head of what points I should be aware of / considering.

Not the end of the world if it can't be claimed back on VAT (etc.) and will still go ahead with it, but trying to ensure I'm not leaving money on the table where I could legally and correctly be claiming for it!

Thanks all for replies.

http://www.housing.gov.ie/search/archived/current/category/housing/type/publications?query=loft%20conversion