2 directors/shareholders who convert vans to camper vans. Conversion work is carried out in one of the Director's garage and they have just spent over £700 on repairing the garage roof.
Whilst I'm aware that no VAT or tax can be allowed does it still go down in the accounts, or straight to DLA?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
2 directors/shareholders who convert vans to camper vans. Conversion work is carried out in one of the Director's garage and they have just spent over £700 on repairing the garage roof.
Whilst I'm aware that no VAT or tax can be allowed does it still go down in the accounts, or straight to DLA?
Hi John,
Not entirely sure what you mean,
Does the Director rent the garage to the Company? or do you mean the Company has paid for it when the Director should have, hence the DLA?
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Not rented, they just use the garage to do the conversions. The conversions are carried out in the garage which is in the Director's garden.
I did tell them at the beginning that it could be rented to the Company, but also that the Director would have to class that as income on his self assessment, so they decided not to bother.
The question is, can the expense be included in the Company accounts but disregarded for tax and vat purposes, as you do with business entertaining.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Is the garage in the garden owned by the business?
This is not modifying the building but rather an expense of maintaining it so if it is why would maintenance (an expense) not be allowable even though the initial capital expenditure as well as any capital expenditure on modifications to the structure would not be?
They haven't even extended the garages life. They have simply performed a repair no different to repairing a blown fuse box or repairing a burst water pipe.
Consider this. patching a felt roof would surely be a repair (expense). Where replaceing a felt roof with tiles would be an improvement (capital expenditure).
Just my reading without knowing the full facts of the case but maybe something to ponder.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Is the garage in the garden owned by the business?
No, the registered address is at the other Director's house.
This is not modifying the building but rather an expense of maintaining it so if it is why would maintenance (an expense) not be allowable even though the initial capital expenditure as well as any capital expenditure on modifications to the structure would not be?
As it is the Directors home I viewed it as maintaining the life of the garage, which the Director would benefit from. Would you say that view is wrong? Would be more than happy to include in the accounts if allowable.
They haven't even extended the garages life. They have simply performed a repair no different to repairing a blown fuse box or repairing a burst water pipe.
Consider this. patching a felt roof would surely be a repair (expense). Where replaceing a felt roof with tiles would be an improvement (capital expenditure).
Just my reading without knowing the full facts of the case but maybe something to ponder.
Shaun.
Thanks Shaun
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Cant see from what you say how the expense can be included in the Company accounts, seems like a personal expense for the Director.
If the garage is being used extensively for the Companies work I still feel it may have been beneficial to rent it to the Company, yes the Director would have to include the rent in their SA but they could claim back some of the running costs as in electric which may be quite high if using lots of power tools, also they might of been able to claim for repairs.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
My go to thought was in relation to the garden sheds that people buy and alway think that they can put it through the business (imagine how they laught when I tell then they can't, lol). However, if they bought them through the business then the repairs and maintenance in some situations where such is neither extending the life of a building or modifyies it in any way could be expensed to the business.
This is obviously not one of those cases but thought worth bringing it up just in case it resulted in one of those lightbulb moments
All the best matey,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
