Working from garage; things to consider before converting!

crystaltips_68

daska wrote: »

Might be worth checking exactly what classification it currently has - it wouldn't necessarily have been changed to business usage or if it was it may not have been changed to residential.

Thanks, how would i go about finding out??

Pennywise

Both HM Revenue & Customs and local councils are usually fairly relaxed about people working from home where the work is, say, just clerical, but you do start having issues where you actually employ someone else to work at your home or have regular visitors to your home, such as suppliers or customers. From what you say, you will have regular customers, and for that reason, I'd suggest you take advice on the following areas:-

1. If part of your home is to be used wholly for business (i.e. a spare room or a converted garage) then that part of your home will more than likely become liable to capital gains tax when you come to sell your home which means splitting your original cost and proceeds according to proportions etc, your home being exempt as its your principal private residence, but your business proportion liable to capital gains tax less entreprenneurs relief and your annual allowance. Probably little or no tax, but it does mean doing the computations and maybe completing and submitting the CGT tax return pages.
2. For the same reasons, you may find yourself liable to business rates and you do need to contact your local council re planning permission.
3. Neither your normal household insurance nor your business insurance will probably currently cover your customers coming into your home - you need to contact them to find out whether your existing policies can be extended or whether you need a new specialist policy.
4. Is the part of your home going to be accessible for the disabled - the law requires all businesses to make reasonable adaptations to accommodate which may also lead onto disabled access toilet facilities etc - again maybe not a problem, but you do need to know for certain whether you have to make provisions or not.
5. You may have to have your portable electrical appliances PAT tested for electrical safety - almost certainly if you use any electrical equipment during your consultations, i.e. automatic chair, special lighting or heating appliances, maybe even your PC etc - again check whether you have to have items PAT tested within your business area or whether it may also extend to other areas of the home to which the customers may have access, i.e. bathrooms, entrance ways, etc.
6. As a business, you have to undertake a fire precautions survey which means you have to identify the risks and take action to minimise them, such as fire safety signs, extinguishers, exit routes, etc. Again, you need to research what is needed.
7. You'll need separate provision for trade waste. You aren't allowed to throw out the business waste in your household bins, nor even allowed to put business recyclables in the household recycling bins. The local council can fine you if you don't have a waste transfer certificate showing that your "trade waste" is being dealt with by a licensed trade waste company. For smallest busineses, most councils let you buy trade waste bin bags at around £1 per bag.

Suddenly you may think that the costs of using dedicated space in someone else's building may not be as bad as it seems! You have to weigh up the pros and cons - i.e. the reduction in rental against the costs of conversion and the ongoing admin and bureacracy which is likely to get worse rather than better. There are a lot of people "working from home" doing little more than sitting at desks using a computer, and far, far fewer working from home seeing customers, employing people, dealing with goods in and goods out - the regulations etc are the reason which is why serviced offices, treatment rooms and small units within industrial buildings are so common.

crystaltips_68

Thanks so much Pennywise, there is alot to think about there! :T Some things are covered already eg waste; i already have a collection, and disabled access and toilet; a home visit would be offered instead. The tax issues are something i hadnt thought of though, so i will talk to my accountant about this. Fire precautions shouldnt be a problem, and PAT testing is something that i have done for my other place of work.

Thanks again, i still need to put some considerable thought to this regarding costs. :rolleyes: