Use of home for small business

orangeslimes

slipp_digby wrote: »

you'd struggle to argue most of these with HMRC with the exception of gas/electric proportional to the floor area of your 'office'

if you are claiming a portion of your council tax/mortgatge is due to business usage, surely this is an admission that part of the property should be eligible for paying business rates?

HMRC use to recommend £2 per week without receipts for home working - I think its now £5, anything above this needs to be strongly justified

As part of my job I prepare accounts for lots of small businesses which work from home and it is acceptable to claim a portion of your council tax and mortgage interest (not the payments)
also i forgot insurange from that list.
but you do obviously have to keep receipts and note of your justification for amount you arrive at.

look at example 2, 4 and 6 here:http://www.hmrc.gov.uk/manuals/bimmanual/BIM47825.htm

slipp_digby

orangeslimes wrote: »

council tax and mortgage interest (not the payments)

agree, your previous post didnt mention interest.

weeclick

One other point (probably a silly one) is that if you are renting the house you must let your landlord know about using a room for business purposes, it shouldnt change anything (and it didnt change anything with me) but apparently they need to know.

We use our spare room here as "an office" which is basically the family computer which I use to check emails and send clients letters, as far as I know as long as the room is seen as multi purpose and can at any time be used for domestic purposes you should be ok (as everyone has said)

If Im right though in order to get away with this you arent allowed clients to turn up to your home?? I could be wrong but this is what Ive been told through word of mouth. Your also not allowed to increase any trafficing in your area.

Savvy_Sue

weeclick, I think you should let EITHER your landlord OR your mortgage provider know that you are running a business from home. ALSO your insurer, even if you don't want to insure the stock, they will want to know! And if you don't tell them, any claim is likely to be problematic.

Also clients coming to the house: I don't think that's a definite no, BUT it is true that if there is a significant increase in traffic or visitors the local authority may take an interest. There may well be a clause in your tenancy agreement saying that you won't run a business from home: this may not be enforced, but if your business creates any kind of 'nuisance' or prevents 'quiet enjoyment' by your neighbours, there will be problems. Always best to be up front, especially if landlord is local authority or housing association.

blue_monkey_2

I've worked from home for a long time and I called our local council to ask them - it's the best way forward. Thy told me that they were not really that interested in people who work from home unless I had huge deliveries blocking the road, people calling at all hours or neighbours complained about my business activities.

I claim a pro-rata allowance of my rent (HA rent - I also had to gain written permission to work from home), council tax, water rates, electricity and Gas. I do not claim Insurance because none of the business equipment is covered under my household Insurance (as I found out when my £700 credit card terminal got nicked!!).

But if you are worried then call them to ask. I used to have one room and my garage set aside for storage, plus I used to use the front room as my office, the council told me they would not be interested.

I have to add that if you are renting privately you will find that you will probably NOT be allowed to work from home and this was in the tenancy agreement. Last year when we was looking to move every single letting agent told me the same thing, that there would not be permission to use the property to work from as the Landlord wopuld not be covered by his Insurance. Something to bear in mind really.

weeclick

I rent privately and have permission from my landlord to conduct work from home, not only do I run my own business emails etc from home but I also work part time for a local blind peoples charity and also work from home for them - again my landlord was happy to let me do this. No clients come to my home, nor do I hold any stock in my house (other than camera equipment)

Everything has been kept all above board and written consent has been received - Perhaps because I only conduct emails from home this is different though? We dont actually run our work duties in the house (this is impossible to do without clients anyway)

blue_monkey_2

Could be weeclick, I would have had to keep stock in the house and so potentially, more likely to be burgled or something? I know lots of people work rom home but when it comes to running a business and those business activities are done in the house more likely to be considered as 'business premises' as such. It is a minefield but something the OP should be aware of really. Always worth checking if in a rental property and if you get written consent that is the best option really. This is what I had to do too.

Savvy_Sue

A private landlord may have been advised to have the "no running a business from home" as a standard clause, either by their solicitor or by the mortgage lender.

It was a standard clause in the HA tenancy agreement where I used to work, but would be waived if discussed beforehand - it may even have said "without permission". We had one potential tenant with whom we stated in advance that we would NOT give permission for him to run a car repair business from the tenancy. Loads of car bits all over the garden, cars parked on the road, lovely ...

weeclick

blue_monkey wrote: »

Could be weeclick, I would have had to keep stock in the house and so potentially, more likely to be burgled or something? I know lots of people work rom home but when it comes to running a business and those business activities are done in the house more likely to be considered as 'business premises' as such. It is a minefield but something the OP should be aware of really. Always worth checking if in a rental property and if you get written consent that is the best option really. This is what I had to do too.

Yeh, Im guessing the high risk of buglarly is why insurance companies arent keen on it when it comes to rentals. Im just thankful I dont have any stock waiting to be sold and I only buy stock as its needed! Plus I wouldnt have the run for any extra stock hanging around lol its like organised chaos in there at the minute!

fluffpot

Hi everyone

Firstly a big thank you for some very helpful replies. I :heart2: this forum!

The house is not rented, but we have a mortgage, so will check with the provider. Insurer is OK with it.

On the basis of info, I don't think we'd be getting into the business rates situation as the room used for storage is a spare bed and could be turned back into one (ie no alterations). The 'office' is a room that also houses our books and no one will visit the property as the business is on line. The CGT scares me a bit too!

I'm passing the link to my OH so he can act on your suggestions/recommendations.

However, I was interested to read about the allowances for home working as I too am self employed but as an electrician and so the majority of my work happens in other people's homes. But I do my office based work at home (on the kitchen table!), so could I be including a weekly cost as an overhead? I don't want to be greedy, but if an MP can do it...........

Thanks again

Fluff