Building shed tax implications?

kevthegaff

Lads thinking of putting up another cubicle shed 40cubicles that will also cover collecting yard(sick of spreading water) Anyways priced the shed 90x75ft 20k incl vat, tank i reckon 20k errecting shed 5-7k, cubicles, mats, feed rails 10k scrapers 8k. Roughly 70k doing some of the cubicles and concrete myself. Anyway is it more tax effecient say if i do it in stages, tank first year, shed second and cubicles third year as i can write it off against tax. Or getting a loan of maybe 50 the first year to do the lot, will it still write off the same amount or just the interest on the loan?

Timmaay

kevthegaff wrote: »

Lads thinking of putting up another cubicle shed 40cubicles that will also cover collecting yard(sick of spreading water) Anyways priced the shed 90x75ft 20k incl vat, tank i reckon 20k errecting shed 5-7k, cubicles, mats, feed rails 10k scrapers 8k. Roughly 70k doing some of the cubicles and concrete myself. Anyway is it more tax effecient say if i do it in stages, tank first year, shed second and cubicles third year as i can write it off against tax. Or getting a loan of maybe 50 the first year to do the lot, will it still write off the same amount or just the interest on the loan?

I don't think it will make any difference, you will be writing it off as capital either way, which is spread over I think 8yrs? The only way doing it in stages might be a tax advantage would be if you manged to put each stage down as maintenance/repairs instead of capital expenditure, but of course I wouldn't be advocating tax dodging as such!

jersey101

kevthegaff wrote: »

Lads thinking of putting up another cubicle shed 40cubicles that will also cover collecting yard(sick of spreading water) Anyways priced the shed 90x75ft 20k incl vat, tank i reckon 20k errecting shed 5-7k, cubicles, mats, feed rails 10k scrapers 8k. Roughly 70k doing some of the cubicles and concrete myself. Anyway is it more tax effecient say if i do it in stages, tank first year, shed second and cubicles third year as i can write it off against tax. Or getting a loan of maybe 50 the first year to do the lot, will it still write off the same amount or just the interest on the loan?

thats an expensive shed. I was at a farm walk and the farmer had built a shed for 1k a cubicle then again the shed had 300 cubicles so maybe the bigger ye build the cheaper it gets. In a matter of speaking. Aslo the lad had a lagoon so that might have made it cheaper

kevthegaff

jersey101 wrote: »

thats an expensive shed. I was at a farm walk and the farmer had built a shed for 1k a cubicle then again the shed had 300 cubicles so maybe the bigger ye build the cheaper it gets. In a matter of speaking. Aslo the lad had a lagoon so that might have made it cheaper

I have only done a rough calculation, it would have the capacity for 80 altogether if i wanted to add more cubicles. My friend is putting up a 70-80 cubicle shed at the moment and he reckons around 70.

jersey101

kevthegaff wrote: »

I have only done a rough calculation, it would have the capacity for 80 altogether if i wanted to add more cubicles. My friend is putting up a 70-80 cubicle shed at the moment and he reckons around 70.

ah okay thats a good price then if it holds that many cubicles

KCTK

Timmaay wrote: »

I don't think it will make any difference, you will be writing it off as capital either way, which is spread over I think 8yrs? The only way doing it in stages might be a tax advantage would be if you manged to put each stage down as maintenance/repairs instead of capital expenditure, but of course I wouldn't be advocating tax dodging as such!

If you put down as maintenance then you can't reclaim the vat (well you can but if audited you'll be in serious trouble) also a figure of say 30k a year for a few years for "maintenance" will stick out and set red flags flying in revenue.

kevthegaff

so your better off saying its a new shed, what will be the capt allowance say on 50k over 8 years. And should you put the loan over the same period?

KCTK

kevthegaff wrote: »

so your better off saying its a new shed, what will be the capt allowance say on 50k over 8 years. And should you put the loan over the same period?

€6250 per year over d 8 years so if your on d higher rate of tax it'll be worth a few bob every year, length of loan is really up to yourself and what amounts of payment each year suit ( and that bank agree!!)

Farmer Pudsey

If the shed cost 80K including vat you expect to claim back about 10.5K on vat. I am assuming that not all vat will be at 13%( I am calculating on an average vat rate of 15%) You would have capital allowances of 8680/year for eight years at the high tax rate this is worth about 3500/year in a tax savings. It is also a figure that you can calculate into your accounts year on year. 50K over 8 years will cost about 7750/year(I am assuming of about a 6% interest rate)over so tax relief will account for half of cost approx.