In this blog we aim to answer the question – is office furniture tax deductible UK-wide? Office furniture tax refers to taxes that apply to the purchase of office furniture, from office desks to chairs, storage units, meeting tables and beyond.
Carry on reading for more details on what office furniture tax is, and the reasons why you may be asking yourself this question in the first place.
What is office furniture tax?
Office furniture tax primarily revolves around VAT (Value Added Tax) and Capital Allowances. The cost of office furniture is generally considered an allowable expense, meaning it can be deducted from your taxable profits.
VAT: When you buy office furniture for your business or home, you'll likely pay VAT on the purchase, which is at the standard rate of 20%. If you have a VAT registered business, however, you can reclaim this as long as the furniture is used for business purposes.
Capital Allowances: Office furniture is considered a capital asset, so your business can claim Capital Allowances, enabling you to deduct the cost of the furniture from your profits before paying tax. Most businesses can also claim the full cost of office furniture under the Annual Investment Allowance (AIA) in the year they buy it. If the AIA has already been used in your case, you can claim Writing Down Allowances (WDA) to spread the tax relief over several years.
Is office furniture tax deductible in the UK?
As mentioned above and in response to the question is office furniture tax deductible UK wide – yes it is. Capital allowances allow you to deduct the cost from your taxable profits and spread the deduction over the useful life of each of your assets.
The AIA allows you to claim a 100% deduction on the cost of qualifying assets, including office furniture, up to a certain limit (currently around one million pounds). This makes it easier for you to upgrade or purchase new office furniture without a substantial upfront burden.
You can also claim capital allowances to account for the depreciation of office furniture, despite the fact the old ‘wear and tear’ allowance was phased out in 2016. This provides office furniture tax relief for the gradual loss of value.
To claim capital allowances or claim AIA you need to:
- Keep detailed records of your purchases and ensure that your office furniture is used for business purposes
- File a claim via your company’s annual tax return
- Follow the guidelines as set out by HM Revenue & Customs (HMRC)
Key criteria for office furniture tax deductions
To qualify for office furniture tax deductions in the UK, there are key criteria that must be met. These ensure that the expense is legitimate and aligns with tax regulations.
- The office furniture must be used exclusively or primarily for business purposes.
- The purchase must be classified as a capital expenditure rather than a running cost or maintenance expense.
- The furniture must qualify for capital allowances.
- If claiming under the AIA, the total expenditure must be within the AIA limit for the year.
- You must maintain detailed records of each purchase, including invoices, receipts, and proof of payment.
- All claims must adhere to the guidelines set out by HMRC.
- Deduction rules differ depending on the business structure (sole trader, partnership, limited company, etc.).
The criteria for office furniture tax deductions are set to ensure fairness, consistency, and effective tax administration.
These clear guidelines:
- prevent misuse
- support investment in business infrastructure
- align with broader economic and legal objectives
- help to maintain a stable and equitable tax system
Recent updates and changes
There have been several updates and changes to tax regulations and allowances related to office furniture and capital expenditures in recent years. They haven’t really changed the answer to the question is office furniture tax deductible UK wide – as the answer has been yes for some time.
We’ve provided a quick summary of some of those key updates and changes below:
AIA limit changes: The AIA annual limit has been adjusted multiple times across numerous years. For example, it was temporarily increased to £1 million between 1 January 2019 and 31 December 2021 to support business investment. It was then dropped down to £200,000 from 1 January 2022. Now it is back up to £1 million. These adjustments stimulate economic growth and investment, especially during periods of economic uncertainty or recovery.
First-Year Allowances (FYA): This was designed to encourage businesses to invest in energy-efficient equipment and certain other assets, allowing them to claim a 100% deduction in the year of purchase. Over the years, FYAs have been periodically reintroduced, withdrawn, or adjusted depending on economic conditions and governmental policy objectives.
Introduction of the ‘Super-Deduction’: For a limited period between April 2021 and April 2023 the UK introduced a ‘super-deduction’. This allowed businesses to claim 130% capital allowances on qualifying new plant and machinery investments. This was a temporary measure with a focus on boosting business investment and driving economic recovery post-pandemic.
Check out our selection of tax deductible office furniture
Here at Order Office Furniture, we have an extensive selection of office furniture, including office desks, office chairs, meeting tables and much, much more. We can also serve all of your office storage needs, as well as reception furniture to ensure your front-of-house reflects your professional image. It’s all tax deductible too!
There are many things to consider when choosing an office chair or any other piece of office furniture. The number of choices and factors to consider can sometimes be daunting. Fret not though, a member of our team is on hand to help and will be more than happy to discuss your options with you.
If you want to speak to a member of our team, then please don’t hesitate to get in touch. Or if you would prefer to see us in person, you can see our full range of home office furniture by making an appointment at our showroom in Huddersfield.
