When A Garage Is Tax Deductible
Bob, our friendly tax inspector, told OnTax Dunfermline Accountants that he accepts that company cars may need garaged in order to protect them and he pointed us to the taxmans manuals that indicate if an employee has to garage a company car and the employee has no garage of their own available, then the employee can rent a nearby garage and charge the full cost to their own Ltd Co.
What the taxman is saying in effect is that you don't need to own the garage yourself necessarily. As it is being uysed soley for the purpose of protecting a business asset (the car) it clearly has no personal use and being 100% business use is therefore tax deductible.
What If The Garage Is A Storeroom?
What though if you store work samples or tools in your garage? OnTax Dunfermline Accountants would urge you to have a "home-working agreement" in place with your Ltd Co thereby allowing it to pay you £3 a week tax free. However there is a sting! If this is paid as an "allowance" it is subject to PAYE whether or not the garage is part of your home. But, if the employer were to claim that this is "rent" it becomes a tax deduction for the company and not taxable via PAYE for the employee. Therefore, the employee would simply charge "rent" to the company.
Disclaimer: The advice contained herein from OnTax Dunfermline Accountants is subject to the tax rates and law applicable in the UK at the time of writing. No reliance should be placed on this article from OnTax Dunfermline Accountants, which has been written from an anecdotal perspective. Always obtain written advice for your specific situation from a properly qualified professional at OnTax Dunfermline Accountants.