Shed

**edayhouse** · 25-02-2011, 09:39 AM

Morning

I have decided to get a shed built to keep all of the extra toys, buggies, highchairs, outdoor toys etc in now this shed is going to be really big and is costing me £1900 in material and £500 in joiner costs. I am getting this built only due to me being a childminder, would not need it otherwise - does this mean that i can put the full cost of £2400 through my books or could someone tell me what percentage?

Many thanks in advance
x

aly · 25-02-2011, 09:54 AM

Originally Posted by edayhouse

Morning

I have decided to get a shed built to keep all of the extra toys, buggies, highchairs, outdoor toys etc in now this shed is going to be really big and is costing me £1900 in material and £500 in joiner costs. I am getting this built only due to me being a childminder, would not need it otherwise - does this mean that i can put the full cost of £2400 through my books or could someone tell me what percentage?

Many thanks in advance
x

all of it...but its not under normal expenses it's the other one..AIA? or something .

thats a lot for a shed though?...We bought a 10x6 one for under £200.

**edayhouse** · 25-02-2011, 09:57 AM

Hi thanks for your reply.
Yes it is alot, we are getting it custom made though so it fits exactly into a part of our garden, shed is something like 19 x 8 - going to split it so half of it is a playhouse with window, chairs etc and second half is for storage.

**MrAnchovy** · 25-02-2011, 10:54 AM

None of it I am afraid, a shed or other building is not allowable as an expense (because it is capital expenditure) or for Annual Investment Allowance (because it not plant and equipment, it is a building).

In general, the only outdoor structures that are eligible for Annual Investment Allowance for childminders is play equipment. If you built a wendy house that you could store things in, that may be eligible.

**MrAnchovy** · 25-02-2011, 11:00 AM

Oops, just reread your second post. It might be possible to claim that half of this structure is plant or equipment, and half is a building, but the obvious contradiction within that may be a problem - I'll have to do a bit of research to confirm that so I'll come back later.

**edayhouse** · 25-02-2011, 11:15 AM

Oh dear the only reason that i am getting to build it so big (had to twist hubbies arm) is cause i would be able to put part of it through my accounts.

Thanks for replies
1/2 is a playhouse and 1/2 is storage

**rickysmiths** · 25-02-2011, 11:22 AM

I think you may be wrong on this one Mr Anchovy. There are many, many childminders on here and not on here that have been advised by the tax office and have claimed over the years for a shed. As long as it is used solely for childminding and you would not have bought it otherwise.

edayhouse you shed is rather expensive as aly said most of us probably spend under £500 for a shed and you can get a pretty large one for that. Then you can claim for the materials for the base also I think most of us put them up ourselves so would not be incurring a £500 labour cost.

My you must have a lot of resourses, I have more than most round here and they are stored in the playroom (12' x 14') on shelves in boxes and I have 2 billy shelves in my wide hall and the rest are in a 6 x 4 shed just outside my back door. I consider I am lucky to have the space I do as it is more than a lot have.

Wouldn't it be cheaper to have a cull of resourses?

I would ring or go in and see your local tax office and check.

For a 'shed' this large you might also need planning permission so it might be wise to check with your local planning dept.

aly · 25-02-2011, 11:43 AM

I agree with rickysmiths, yes we can claim, it is for the purpose of holding childminding equipment.

aly · 25-02-2011, 11:45 AM

Originally Posted by rickysmiths

I think you may be wrong on this one Mr Anchovy. There are many, many childminders on here and not on here that have been advised by the tax office and have claimed over the years for a shed. As long as it is used solely for childminding and you would not have bought it otherwise.

edayhouse you shed is rather expensive as aly said most of us probably spend under £500 for a shed and you can get a pretty large one for that. Then you can claim for the materials for the base also I think most of us put them up ourselves so would not be incurring a £500 labour cost.

My you must have a lot of resourses, I have more than most round here and they are stored in the playroom (12' x 14') on shelves in boxes and I have 2 billy shelves in my wide hall and the rest are in a 6 x 4 shed just outside my back door. I consider I am lucky to have the space I do as it is more than a lot have.

Wouldn't it be cheaper to have a cull of resourses?

I would ring or go in and see your local tax office and check.

For a 'shed' this large you might also need planning permission so it might be wise to check with your local planning dept.

that is a very good point also.

**Andrea08** · 25-02-2011, 11:55 AM

mmmm i put my wendy house and shed through my normal ncma book keeping..

also ofsted said my front wall needed to be almost 2ft taller so the cost of a new wall went through my books too

then my DO said my drive was a little unsafe for parents and as the public use my drive to walk and push prams etc i needed to re-tarmak it for safety not cheep gravel which i was going to do so i put 1/2 of the cost £2000 through my books

the way i see it is if its for work put it through... and i asked HMRC and they agreed,

only now im off for a new mortgage bank manager said i dont earn enough because of all the expences lol

xxx

**rickysmiths** · 25-02-2011, 12:58 PM

Originally Posted by Andrea08

mmmm i put my wendy house and shed through my normal ncma book keeping..

also ofsted said my front wall needed to be almost 2ft taller so the cost of a new wall went through my books too

then my DO said my drive was a little unsafe for parents and as the public use my drive to walk and push prams etc i needed to re-tarmak it for safety not cheep gravel which i was going to do so i put 1/2 of the cost £2000 through my books

the way i see it is if its for work put it through... and i asked HMRC and they agreed,

only now im off for a new mortgage bank manager said i dont earn enough because of all the expences lol

xxx

Yes thats why I never go by the 2/3 expenses rule a lot seem to use. I usually have no more than a 1/3 of income as expenses and would rather pay a bit more tax and earn more. It paid dividends when we needed a larger Mortgage last year.

**donnam** · 25-02-2011, 01:12 PM

Hi i would claim full cost as long as tou can prove if investigated it is for childminding only,i put down everything i would otherwise not need.

**edayhouse** · 25-02-2011, 01:51 PM

HI thanks for all of your replies. I CAN justify needing a big shed, i have loads of outdoor toys, some that were given to me by an ex childminder and others that i have bought over the past few years, see-saws, swings, sandpits etc etc - bikes, helmets the list goes on.

I also have 2 strollers, 1 double side by side stroller, 1 3 wheeler buggie, 2 highchairs, kids picnic bench, a cotbed that i am not using at the moment and loads more.

Extra resources that i have in boxes craft items, happyland toys etc etc i also have a playroom in my house but it is very small and just really used for kiddies to sleep in and have chill out time.

Part of the shed will be a playhouse. Other half for storage so i dont think it will work out that big.

I will contact my local tax office for clarification.

My husband nor i are very good at DIY/Joinery therefore we would need help in putting together the shed.

And yes i am full with mindees at the moment.

**MaryMary** · 25-02-2011, 02:38 PM

We are looking into getting a 12x8 shed/playhouse for childminding, so please let us know what you find out

I have no room for storage and I am currently storing 2 car seats in my old car!

I need to sell the car to pay for the shed.
It is a summerhouse type shed we are looking at, costing roughly £1000, including delivery/installation. We aren't very good at DIY either, and my DH just doesn't have the time.
I am looking forward to having somewhere to store everything, with a bit of space for outdoor play aswell

I can't get to things when they are in the loft, and rotation is difficult

**mama2three** · 25-02-2011, 05:24 PM

Its not that enormous if you are using only half for storage .. I have a 10x8 and it is full! I am putting it through the books , and am prepared to argue the point that it is solely used for cming. it did only cost £300 erected though , much less likely to be investigated!

**MrAnchovy** · 26-02-2011, 01:42 AM

Originally Posted by rickysmiths

There are many, many childminders on here ... that have been advised by the tax office [that they can claim for] a shed.

Really? I don't see any evidence of that (searched for HMRC and shed, only 4 threads, none relevant).

It will be interesting to hear what HMRC say.

On the mixed use bit, yes a structure with more than one use is treated as separate structures, so the play house part you can claim for - provided it is actually designed and built specifically as a play house (for instance like this) *not* just as a somewhere for children to play like this. Now if the whole thing was designed and built as a playhouse and you did use it all for play, but also used some of it for storage some of the time, it could all qualify as a play house.

But, and this is a big but, if HMRC inspected your accounts they may decide to disallow it on the basis that the play house is a Building (on which neither AIA nor any other allowance is now available), or is a Structure that is not Plant or Machinery. The most relevant case law concerns a swimming pool, which was found to qualify for capital allowances. The deciding factor was that the business use of the swimming pool (the enjoyment of its use by paying residents of a holiday caravan park) was something that took place using the swimming pool, not something that could in general happen anywhere but just happened to take place there. Streching this argument to a play house is obviously treading a fine line - the play that takes place inside a play house could in fact take place inside any structure.

The way that this would work is that HMRC would decide that you could not claim the AIA for the expense. They would raise an assessment on you for tax and Class 4 NI on the amount. You could ask for this assessment to be reviewed, or take it to a tribunal. In order to be successful, you would probably need legal representation to research the case law and argue the relevant points, which would cost a significant sum of money.

So if you think that you are entitled to claim, go ahead and claim. But be prepared that HMRC may take a different view.

If you write to HMRC explaining all the facts and ask for a 'post-transaction ruling' under HMRC Code of Practice 10 (known in the trade as a COP10 ruling), they will give you a written answer which you can rely on. In this situation I think it would be unwise to rely on a telephone conversation because it would be difficult for you to prove that you had disclosed all the relevant facts.

aly · 26-02-2011, 11:41 AM

Originally Posted by MrAnchovy

Really? I don't see any evidence of that (searched for HMRC and shed, only 4 threads, none relevant).
If you only look in the bookeeping section you may only find 4...try the other forums too!

It will be interesting to hear what HMRC say.
We have been told already, so that is what we do.!!

On the mixed use bit, yes a structure with more than one use is treated as separate structures, so the play house part you can claim for - provided it is actually designed and built specifically as a play house (for instance like this) *not* just as a somewhere for children to play like this. Now if the whole thing was designed and built as a playhouse and you did use it all for play, but also used some of it for storage some of the time, it could all qualify as a play house.

I'm sorry but you seem to disagree with everything WE have been told by HMRC/NCMA that if we can justify it we can claim for it.

**rickysmiths** · 26-02-2011, 03:31 PM

Originally Posted by aly

I'm sorry but you seem to disagree with everything WE have been told by HMRC/NCMA that if we can justify it we can claim for it.

That is why I posted Aly. I'm sure he is a very good accountant with the best of intensions, but I am glad he is not mine. I'm not sure he fully understands the nauture of childminding or believes the fact that there are some exceptions in what we are allowed to claim that may not be written in the rule book but none the less have been agreed with individuals or NCMA on our behalf.

If the IR is ever of the belief that we are trying it on and claiming too much and not paying enough tax then they can always investigate and as most of us keep detailed accounts and reciepts it would not be a problem for us to demonstrate what we are using for our businesses.

You don't often hear of Childminders being investigated though, so one would assume that we are getting it right most of the time.

**rickysmiths** · 26-02-2011, 03:43 PM

Originally Posted by MrAnchovy

Really? I don't see any evidence of that (searched for HMRC and shed, only 4 threads, none relevant).

It will be interesting to hear what HMRC say.

On the mixed use bit, yes a structure with more than one use is treated as separate structures, so the play house part you can claim for - provided it is actually designed and built specifically as a play house (for instance like this) *not* just as a somewhere for children to play like this. Now if the whole thing was designed and built as a playhouse and you did use it all for play, but also used some of it for storage some of the time, it could all qualify as a play house.

But, and this is a big but, if HMRC inspected your accounts they may decide to disallow it on the basis that the play house is a Building (on which neither AIA nor any other allowance is now available), or is a Structure that is not Plant or Machinery. The most relevant case law concerns a swimming pool, which was found to qualify for capital allowances. The deciding factor was that the business use of the swimming pool (the enjoyment of its use by paying residents of a holiday caravan park) was something that took place using the swimming pool, not something that could in general happen anywhere but just happened to take place there. Streching this argument to a play house is obviously treading a fine line - the play that takes place inside a play house could in fact take place inside any structure.

The way that this would work is that HMRC would decide that you could not claim the AIA for the expense. They would raise an assessment on you for tax and Class 4 NI on the amount. You could ask for this assessment to be reviewed, or take it to a tribunal. In order to be successful, you would probably need legal representation to research the case law and argue the relevant points, which would cost a significant sum of money.

So if you think that you are entitled to claim, go ahead and claim. But be prepared that HMRC may take a different view.

If you write to HMRC explaining all the facts and ask for a 'post-transaction ruling' under HMRC Code of Practice 10 (known in the trade as a COP10 ruling), they will give you a written answer which you can rely on. In this situation I think it would be unwise to rely on a telephone conversation because it would be difficult for you to prove that you had disclosed all the relevant facts.

Where have you looked for the evidence? Have you asked a number of childminders? Well |I claimed for my shed 4 /5 years ago with the blessing of my Accountant who goes through my books, advises me and then fills in and submits my tax return.

In the cm group I go to I know of 7 childminders who have claimed for sheds in the last 5yrs and one who this year will be claiming for her second one because the first fell to pieces last summer. None of them have been investigated.

In fact, and I'm not sure how she gets away with it, but the one claiming for her second shed goes to her local tax office each year and they go through all her expenses and reciepts and help her fill in her tax return. She has claimed for things I never thought to claim for and with the help of my accountant I claim for everything I can. Also this cms income is almost the same as mine, but because she claims double the expenses I do and hers are usually well over 2/3 of he gross income, she pays half the tax I do and has never in 20yrs of minding been investigated. She paid £800 tax for last year on nearly £30,000 gross income!! But the tax office are effectively doing her accounts for her!!!