Buying storage shed

R

Redder Than Red

Registered User
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55
hi all,
We have a VERY tight amount of space in the place we rent and ideally I need to build/buy/rent some storage. Putting anything outside the rented premises here is not an option.
So I looked into renting a shed and considered moving but neither are overly appealing.
Then someone suggested I simply buy/build a shed in the back yard of my house/garden.

So basically if I was to do this it would cost possibly 30k or there abouts. Is there any reason I cannot purchase a metal shed on concrete base and put it in my back garden (it's a big garden anyway in rural setting so it's no bother sacrificing some grass for this) but I'd be paying for it through the business, with an invoice to show for it of course.

Can anyone advise if Revenue would have any interest in me doing this (like would they come asking me why a shed purchased through business is sitting in my garden?) and also just is there anything obvious I'm missing before I go any further? I realise if I go to sell the house at some point the company loses a shed it paid for, which is not ideal but I'm not intending moving. The company would own this, not me. And it genuinely would be used for storage for the company, I already have a shed for personal use which covers me, so it's all above board in that regard. It's just a bit unusual which is why I'm getting opinions before doing anything.

Thanks in advance.
 
The general test of deductibility when considering business expenses is whether the expense has been spent wholly, exclusively and necessarily in the operation of the business. The wholly provision rules out circumstances where an expense is incurred that serves a dual purpose. The full amount of the expense must relate to the operating of the business, in order to be claimed. Exclusive means the expense just related to the business. This rule is only satisfied if the businesses sole purpose for incurring the expense is for the purposes of their trade, profession or vocation.
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An issue that you will need to determine is who will own the shed. The general principle of property law is that the person who owns the land also owns what is on it. The direct implication is that if the shed is regarded as belonging to you then you have taken funds from the company for your own purpose and that is either salary, a dividend or a loan. All have tax implications. You can, of course, have a lease from you to the company and what are the tax implications here? My main point is that there are a few tax issues here that aren't necessairly staight forward. Then a different tax head - vat and what are the vat implications? No easy answer I'm afraid.
 
Thanks to you both. If i take Steven Barrett’s post there then basically the shed needs to be exclusively used for storage for the business, which will 100% be true. I have a garden shed already for private use.
Although as Dub says it’s on land owned by me. Then again it’s a metal shed and not a permanent fixture.
It’s the only affordable way i can find to do this so ideally I want to go ahead but obviously don’t want to land myself in bother.
Anyway, food for thought, thanks for the replies
 
dublin67 said:
An issue that you will need to determine is who will own the shed. The general principle of property law is that the person who owns the land also owns what is on it.
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What about a mobile home? Personally I cannot see how a moveable shed on a plot of ground gives ownership to the shed.
 
Redder Than Red said:
Can anyone advise if Revenue would have any interest in me doing this (like would they come asking me why a shed purchased through business is sitting in my garden?) and also just is there anything obvious I'm missing before I go any further? I realise if I go to sell the house at some point the company loses a shed it paid for, which is not ideal but I'm not intending moving. The company would own this, not me. And it genuinely would be used for storage for the company, I already have a shed for personal use which covers me, so it's all above board in that regard. It's just a bit unusual which is why I'm getting opinions before doing anything.

Thanks in advance.
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Sounds to me like a legitimate business purchase. because it's wholly, exclusively and necessarily in the operation of the business

I assume such a shed is written off in the accounts via depreciation. So after a certain time it has no book value. Then why would it matter if the house is sold later.
 
Bronte said:
Sounds to me like a legitimate business purchase. because it's wholly, exclusively and necessarily in the operation of the business
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+1
Bronte said:
I assume such a shed is written off in the accounts via depreciation. So after a certain time it has no book value. Then why would it matter if the house is sold later.
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Irrelevant.

The OP should seriously consider disposing of the shed if they're thinking of ever selling the house. Professional advice would be helpful if/when that time comes.
 
T McGibney said:
+1

Irrelevant.

The OP should seriously consider disposing of the shed if they're thinking of ever selling the house. Professional advice would be helpful if/when that time comes.
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Ok well that's good to know. So the solution is he can write it off. And if he's selling the house, dump the shed or sell it and presumably put the shed value into the business accounts.
 
Bronte said:
Ok well that's good to know. So the solution is he can write it off. And if he's selling the house, dump the shed or sell it and presumably put the shed value into the business accounts.
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I'd frankly be reserving that call for his accountant to make.

But I don't think there should be an issue with his company financing the purchase of the item, once it retains ownership to it.
 
Bronte said:
What about a mobile home? Personally I cannot see how a moveable shed on a plot of ground gives ownership to the shed.
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A mobile home can only be stored on a property for up to 9 months, beyond that planning permission is required.
 
Leo said:
A mobile home can only be stored on a property for up to 9 months, beyond that planning permission is required.
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In my time I know of many mobile homes on land for years. One case was a warring elderly couple who being Catholic would not divorce so solution was he was put in the mobile home in the driveway.
 
Bronte said:
In my time I know of many mobile homes on land for years. One case was a warring elderly couple who being Catholic would not divorce so solution was he was put in the mobile home in the driveway.
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In my time I know of many people who robbed banks, just because someone else does something or gets away with something does not make it legal.
 
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