Can my company pay for loft conversion?

I run a limited company as a freelancer and I work from home – I am planning to convert our loft into a new bedroom and an office – can I claim some of the costs through my company?

 

Can I Reclaim Loft Conversion Costs

 

Answer, January 2018

Loft conversion costs

 

The main building costs of your loft conversion will be treated as capital expenditure on your personal residence so you won’t be able to put any of these costs through your business.

Your personal property will be owned by you personally, rather than being owned by your company, so the conversion work could not be treated as a business capital expense.

Even if your property was owned by your company the conversion costs are going to be mainly of a capital nature anyway which means that they are typically not eligible for tax relief (see capital allowances).

However there will be some specific expenses related to your new loft office that you can put through your company if they are 100% for your business office, these will typically include:

  • Office furniture – desks, chairs, lights, phones
  • Computer equipment
  • Shelving & storage
  • Carpet

To be safe make sure any of these items are invoiced to your company.

If, for example, you are installing carpet in the whole loft, you will need to ask the carpet provider to raise two invoices – one invoice addressed to your company for the element related to your new office and one addressed to you personally for the rest of the work.

Remember you can still consider setting up a license agreement between you personally and your company which would enable you to charge some rent to your company for the office space – our article about home office costs for limited companies covers this.

On a related topic you may be interested in our article about tax relief for garden offices which have some slightly different rules.