Can I Claim Capital Allowances on a Garden Office? A UK Business Owner’s Guide

If you're investing in a garden office to run your business from home, it's only natural to ask: Can I claim capital allowances on a garden office in the UK?

The answer is: yes, but only in part. While you generally cannot claim capital allowances on the structure itself, many of the internal elements of your garden office do qualify. Knowing what you can claim — and how — can significantly reduce your tax bill over time.

In this guide, we break down how capital allowances work for garden offices, what HMRC allows, and how both limited companies and sole traders can maximise tax efficiency.

What Are Capital Allowances?

Capital allowances are a way for UK businesses to claim tax relief on certain capital expenditures — typically equipment or assets used for business purposes. Instead of deducting the full cost as an expense, you deduct a portion of the value over time, reducing your taxable profit.

Common qualifying items include:

• Office furniture

• Heating systems

• Electrical wiring

• IT equipment

Now, let’s apply that to a garden office.

Can You Claim Capital Allowances on a Garden Office?

No – the building itself is not eligible

HMRC classifies permanent buildings and structures — including most garden offices — as “capital assets” that are not plant or machinery. This means the cost of:

• The timber or metal framework

• Insulated wall panels

• Roofing, windows and doors

• Foundations and site preparation cannot be claimed under capital allowances.

However...

Yes – internal fixtures can qualify

You can claim capital allowances on:

• Electrical systems (wiring, sockets, lighting)

• Heating and air conditioning units

• Built-in storage used for business

• Furniture and office equipment (desks, chairs, shelving)

• Cabling and network installation

• Alarm systems and fire protection

These are typically classed as:

• Plant and machinery (qualifying for Annual Investment Allowance — AIA)

• Or Integral features (subject to writing down allowances)

More info: HMRC capital allowances guide

Limited Companies vs Sole Traders

Limited Companies

Limited companies can:

• Pay for the office build

• Claim capital allowances on qualifying fixtures and fittings

• Offset these costs against taxable profits

This is most effective when the garden office is used exclusively for business.

Important: If the office is company-owned and fixed to your land, it may be subject to Capital Gains Tax (CGT) when selling your home.

Self-Employed / Sole Traders

If you're self-employed, you can also:

• Claim capital allowances on fixtures, equipment and fit-out

• Use Simplified Expenses or Actual Cost Method for running costs

However:

• You cannot claim for the cost of the structure

• You must apportion expenses fairly between personal and business use

Tip: Avoid claiming 100% business use unless the space is never used personally — doing so can affect Private Residence Relief when you sell your home.

Example: What You Could Claim

Expense Item	Claimable via Capital Allowances?
Garden office structure (walls, roof)	❌ No
Electrical wiring and sockets	✅ Yes
LED lighting system	✅ Yes
Office furniture and desks	✅ Yes
Climate control unit	✅ Yes
External landscaping or decking	❌ No

If your total claimable fixtures and fittings total £5,000, and you’re eligible for Annual Investment Allowance, you could deduct the full £5,000 from your taxable profit in the current tax year.

What to Watch Out For

• Mixed use: If the space is used personally (e.g. hobby room or guest space), you must apportion your claim accordingly.

• Accurate records: Keep all invoices, contracts, and a breakdown of business vs personal use.

• CGT implications: Company-owned offices on private land may trigger capital gains tax when the home is sold.

• Planning permissions: Although many garden offices fall under permitted development, always confirm compliance.

Frequently Asked Questions

Q: Can I claim capital allowances on the entire garden office build? No — you can only claim for qualifying fixtures and fittings, not the building’s structure or shell.

Q: Can I use Annual Investment Allowance for garden office items? Yes — AIA can be used to claim 100% tax relief on most plants and machinery (including electrical systems, heating, furniture) up to £1 million per year.

Q: Does claiming capital allowances affect Capital Gains Tax? It can, especially if the business (not you personally) owns the asset and it's permanently affixed to your land.

Q: Can I claim if I only use the office part-time? Yes, but you must apportion your claim based on how much of the use is business-related.

Summary: What Can You Claim?

Category	Capital Allowance Eligibility
Structure & building works	❌ Not eligible
Fixtures & electrics	✅ Yes
Heating & lighting systems	✅ Yes
Office furniture & IT kit	✅ Yes
Broadband & phone line	❌ No (running expense instead)
External landscaping	❌ No

Build a Smart, Tax-Efficient Garden Office

At CS Garden Offices, we design and construct fully insulated, professional-quality garden offices tailored for business use. From integrated electrics to stylish finishes, we help you create a workspace that’s both functional and potentially tax-efficient.

Explore our Bespoke Garden Offices today and Get a workspace that works for your business — and supports long-term value through smart planning.