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I want to run a business from home - help!

When youre starting out in business, it can seem like a good idea to start running from home to keep your costs low. But is there anything you need to be aware of that could effect your plans?

Unfortunately, there are some property laws that you might have to adhere to, depending on your circumstances. This is the first thing you should look into before considering whether or not to run a home-based business.

What are the restrictions on houses?

Your property may be affected by restrictive covenants that limit the use of the property to residential purposes only. This could mean you are unable to use the property for business purposes. If your neighbours are irritated by excessive noise as a result of your business, or if you have customers taking up parking spaces, they may feel the need to enforce these covenants to stop the nuisance behaviour. The Title Deeds to the property (on record at the Land Registry) should include details of any restrictions you may be facing, and your solicitor should make you aware of any restrictions when you purchase the property.

What are the restrictions on leasehold flats?

In short, no. Your leasehold contains the dos 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.

What are the restrictions on mortgaged houses?

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.

Is planning permission needed?

Like any other form of planning permission, it's only needed if you're going to be changing the structure or layout of the property to allow your business to be there. For example, if you're adding another room as an office space, then you need planning permission. But if you're converting a room from a bedroom into an office, then you wouldn't need to have it.

Do you need planning permission for a change of use?

Will your property remain mainly residential, or will it now be mostly business? Will there be increased traffic 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 a 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.

How is buildings and contents insurance affected?

Your current policy may be fine as it is. However, it may also be invalidated, which means you need to check it carefully.

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.

Does the local authority need to be informed?

Whether you need to inform the local authority depends on the nature of your business. Some businesses need specific licences before they can 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.

Is the tax bill affected?

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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