I want to run a business from home - help!
You may not realise but there are property laws that you have to adhere to if you want to run a business from home. This is the first thing you should look into before considering whether or not to run a home based business.
What are the restrictions? I don't even know where to look
Your property may be affected by restrictive covenants that limit the use of the property. This could mean you are unable to use it for business purposes. It is likely that your neighbours are the ones that will be able to enforce any covenants, and they could apply for a court order in able to stop you from trading out of the property. The Title Deeds to the property (on record at the Land Registry) should include details of any restrictions you may be facing. Your solicitor should make you aware of any restrictions when you purchase the property.
I live in a flat but I own the leasehold. I can do what I want, right?
In short, no. Your leasehold contains the do's and don'ts of living there. If the leasehold says you can't run a business, then you can't run a business. You should check it for any restrictions before starting up.
My house is mortgaged. I can still run the business though, can't I?
You'll need to check with your mortgage provider. Some of them will only allow the mortgage to be held on purely residential properties. If you breach the terms of the mortgage, you may end up needing to pay it back immediately.
Do I need planning permission?
Like any other form of planning permission, it's only needed if you're going to be changing the layout of the property in order to allow your business to be there. For example, if you're adding another room in order to have an office space then you would. But if you're converting a room from a bedroom into an office then you wouldn't.
I'm not changing the layout, but I am changing the use
Will your property remain mainly residential, or will it now be mostly business? Will there be increased traffic to the area that is out of the ordinary? If you think that the property will now mainly be used for business, or that the increased traffic will disturb your neighbours; then you should apply to have the property changed from residential to business use. This is done through a planning application for change of use. If you are unsure whether the above questions can be answered then you can apply for a Certificate of Proposed Lawful Use or Development from your local council. If you are still unsure then the Planning Portal has some useful links you may want to check out.
Will I need to change my buildings and contents insurance?
You need to look at it. You may fine with it as it is, but it may also be invalidated. If your policy prohibits business use then you should talk to your provider and see what their advice is. Also you may need to look at employers and/or public liability insurance, depending on the nature of your business.
Do I need to tell the local authority?
Well that depends on the nature of your business, again. Some businesses need specific licences which are required to operate. Check out this handy Licence Finder from the gov.uk website to see if your business could need one. You will also need to make sure that you comply with all current legislation and regulations.
Will this affect my council tax bill?
It might affect your council tax. Businesses are affected by business rates rather than council tax. So, when working from home, depending on the use of the property for business, rather than for residential, you may end up paying business rates on the part of the property that is used for business, while the remainder of the property will still be subject to council tax.
This all sounds confusing but you need to consider it when setting up at home. Also this link on the gov.uk website gives some useful information as well as contact details for different agencies. You may wish to give it a look before setting up.
All references to current legislation are correct at the time of writing, and should only be used as a guide. We recommend seeking professional advice before acting on the information in this article.
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