Businesses are financially preparing for the tax changes announced in Labour’s budget and understandably being extra cautious in their spending. One asset every company cannot get away from and, if sourced poorly, can cost your business a lot is office furniture.
What can be done?
Office furniture does not need to be just an expense. There are ways for your company to have the workspaces it needs while saving on tax or taking advantage of company allowances*.
Is office furniture tax deductible?
Yes. In this article, we will discuss some of the ways your business can increase the amount of deductible tax you are paying, with information for grants and payment options to support your decisions on building your perfect office space. Please note, the options presented are not specific to your business, so please get financial/tax advice from qualified professionals to ensure these options apply to you. Additionally, not all office furniture pieces qualify for some of these allowances.
VAT
A straightforward tax to consider, but if you are a VAT-registered business you can claim the VAT (20%) back on your office furniture purchases as long as it’s for business use only.
Capital Allowance
Furniture pieces purchased can be categorised as a capital expense, which means you can claim capital allowance on the full cost of the items. Capital allowances allow you to deduct the cost of the assets (office furniture) from your company’s taxable income.
Annual Investment Allowance (AIA)
Due to office furniture being classified as a capital expense, your business is then able to take advantage of the AIA. The AIA amount is £1 million and is taken off your overall profits before tax, reducing the amount of tax your business pays at the end of the year.
Writing Down Allowance (WDA)
WDA’s are similar to AIA, but allow businesses to offset the cost of assets over time rather than immediate annual reliefs. The qualifying pieces of office furniture for WDA allow businesses to deduct a percentage of the cost against their taxable profits.
If you cannot afford to spend on a full suite of office furniture for your office, one more option available to your business is leasing office furniture. Rather than spending one lump sum on your workspace you can spread out your costs, providing your team with the furniture they need.
What grants are there for office furniture?
Another option from tax deductions and lease options are regional grants available that do cover office furniture. below is a list of regional examples currently available that could support your ambitions to build the office space your company needs:
Affordable office furniture
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*Readers are encouraged to do their own research and consult with a financial professional before making any investment/purchase decisions.
Frequently Asked Questions
Is used office furniture tax-deductible in the UK?
Yes, office furniture is tax-deductible in the UK. Companies can claim the allowances such as the VAT, Capital Allowance, Annual Investment Allowance (AIA), and Writing Down Allowance (WDA) to increase the amount of deductible tax. However, not all office furniture pieces qualify for some of these allowances, so it is advisable to seek financial/tax advice from qualified professionals to ensure these options apply to your situation
Are there any grants available to help with the cost of office furniture?
Yes, there are numerous regional grants that can help cover the cost of office furniture. Sone of the grants currently available to support your companies in building the office space include the UnLtd Scaling Up Award, Worcestershire Growth Programme, New Anglia Small Grant Scheme, Crawley Small Business Grant Scheme, and Mansfield Business Grant Schemes.
Is it better to lease or buy office furniture?
Whether to lease or buy office furniture depends on your business’s needs and financial situation. Buying new office furniture can offer long-term cost savings and ownership, while leasing is often more cost effective. If you cannot afford to spend on a full suite of office furniture for your office, leasing office furniture allows you to spread out your costs, providing your team with the necessary furniture without a large upfront investment. Another option is to purchase refurbished office furniture, which is high-quality, budget-friendly, and often comes with a warranty.
