I plan to run a business from home. It will not change the nature of the property from a planning perspective, but I'd like to do a couple of things:1) I need to rearrange my basement (structurally) to give me a study I can work in and consult from; 2) I need to redo my kitchen so that I can hold small cooking demonstrations and develop recipes for my business. I don't have significant income from my business yet, but can I deduct the costs of these alterations for tax purposes?  If so, for how long? (it is likely to cost me a lot more than I'll make in the first year or so).Will I need to apportion it between business and interest cost?  (To clarify, my kitchen is perfectly serviceable as a family kitchen but not in good enough order to host demonstrations.  If I wasn't planning on doing demonstrations I wouldn't need to upgrade it, but it will still be used as a family kitchen).

In my opinion, what you are doing is altering your existing premises to make them suitable to run your business from. If you look on www.hmrc.gov.uk/manuals/bimmanual/BIM35460.htm you can see that expenditure on alterations is classed as capital expenditure, and therefore not allowable as a business expense against your business income. However, if you need to borrow in order to fund this capital outlay, then the interest you need to pay your lender is an allowable expense; see www.hmrc.gov.uk/manuals/bimmanual/BIM45665.htm.