Limited Company - Allowable expenses

Hi JP,

I personally wouldn't put any of them through due to period between them being installed and the use of the room as an office unless they were purposefully installed with the intention of them being used as an office but as you say the room is also used domestically so it could be argued for that reason, if it was less than a year then I would claim a proporation. Is the alarm and CCTV connected to the rest of the house or just primarily that room? If i was going to claim then I would just proportion the cost to that room and claim that amount only.

The new windows, underfloor heating & insulation is more of a home improvement rather than being a cost to the business, my understanding is that improvements to premises are not an allowable expense anyway.

I guess it comes down to why they bought it. If it was always with the intention of providing security for this business then I suppose the pre-trading expenses rules apply and it's allowable, albeit complicated by a potential private use element.

Like Kelsmick says, you can claim a proportion of the costs of running the home too as 'Use of Home as office', but you need to be careful about creating a Capital Gains tax problem when they come to sell their house (unless it's rented..?)

I suppose if you can't demonstrate that the purchase of the security system was wholly for the business then, at a push, you might treat it as 'capital introduced' at its market value when first put in to the business, but it's a bit of a fudge and would be complicated but any private-use element. Depends how much the client might be up for a fight if HMRC inspected I guess...