Mortgage Lender won't let me register a business at my home address

wcsoon

Hi,

I hope this is the right forum to be posting this in. I have an Alliance & Leicester mortgage on my home. I want to set up my own software development company, and it'll mainly be me working on my laptop at home (which I do anyways). No clients would visit, no conversion of any rooms to an office, so no practical change at all to the property or the usage of it other than the fact that the address will be going down as my company's registered address at Companies House.

I spoke to someone over the phone at Alliance & Leicester, who stated quite clearly that I would not be allowed to do this as my mortgage "is a strictly residential only mortgage". I then wrote to Customer Services putting forth my case (it would cost me money to rent a "virtual" address, money which I don't have and would rather use to pay off my mortgage even if I had it), but received a response to the same effect.

Has anyone had any similar experiences? Can they do this? Is there anything I can do to obtain the right to use my home address as my registered company address? Alternatively, what other ways around it are there? Any help would be very much appreciated!

Senior_Paper_Monitor

You can obtain 'registered office' facilities from most accountants or solicitors and company formation providers. Some 'virtual office' providers may also assist I believe.

I'm off to check the wording of the A&L limitations because if it is that strict I am surprised - and I'm certain thousands of self-employed home owners are doing so..

wcsoon

Thanks for the quick reply - I have looked into a lot of those registered office facility providers and basically it boils down to me being unwilling to pay anyone for the services (I've considered the advantages of not having my home address on my company website/letterhead, but I'm just too cheap!) when I should be able to register the company at my home!

I was really surprised as well, I only asked A&L thinking it was a formality, only to be told "No, you can't". Unfortunately, now that I've had a solid "No", I doubt I can just carry on doing it anyway and pleading ignorance, hence wondering whether anyone's had a similar story and any success in pleading their case

Leon_W

Never heard of that one before.

There must be literally thousands and thousands of plumbers, gas engineers, electricians, mortgage brokers :T that have offices they work on from home.

Fair enough, you can't turn your house into a factory or retail unit, but a guy on a laptop sat at the kitchen table does not get anywhere near that.

Let us know how it goes.

GMS

I would go back to the lender and ask for a manager.

You are looking to use the property as a correspondence address and a place to conduct admin work, not as an office visited by clients.

What if a self employed builder had a mortgage with them? Would they make him write invoices at a different address, and obviously his van would need to be parked somewhere else!!

Seems ridiculous what is being said.

Trollfever

Do you need planning permission to run a SoHo?

http://en.wikipedia.org/wiki/Small_office/home_office

Try Business Link.

dkmax_2

wcsoon wrote: »

I spoke to someone over the phone at Alliance & Leicester, who stated quite clearly that I would not be allowed to do this as my mortgage "is a strictly residential only mortgage".

My first question is why did you ask them?

As far as I can see their interest in your property will not be materially affected in any way by your use of the address and I do not know upon what legal basis they can prevent you from doing so.
You are not turning a residential property into a commercial one or altering the nature or character of the premises in any way.

Next they'll be telling you you can't keep pets and aren't allowed to hang pictures on the wall or put up shelves.

wcsoon

I don't think I need planning permission (although I could be wrong) as I am not modifying the property in any way shape or form to accommodate my work - in my current job I quite regularly work from home anyway, mainly on the sofa or the kitchen table.

I think I am going to have to dig through the terms & conditions very carefully and then try to speak to someone higher up - I suspect so far I've just been speaking to front line staff who've been told the standard answer to "can I run a business from my home" without considering all the different circumstances.

@dkmax, I asked them I guess mainly because as a first time buyer I was really worried about what I had to inform them about, didn't want them coming back and saying "you haven't informed us of such and such and are in breach of your mortgage terms, please repay the entire sum immediately". Rather paranoid of me I know, but I thought it wouldn't hurt - that showed me! Pretty much the only thing I've stopped short of asking them actually is the pets and hanging pictures up thing.

The other alternative I'm thinking of is working as a sole trader for a while until I can justify paying for a virtual office or a separate proper office as the business grows. I've checked Business Link and from my understanding of the rules, I can be a sole trader t/a any company name, and not have to register addresses or anything like that? Would that get round the block that A&L have put in my way? Will my T/A name be protected in the same way as if my company was a registered, limited company at Companies House? What are the tax implications of becoming a sole trader as opposed to owning a limited company? I do intend to stay in my day job while running the side business until the business grows enough. I've tried reading things on Business Link and HMRC website but end up finding myself even more confused and worried than before I started! Sorry, I realise some of these questions may be slightly off topic from the original post, please let me know if I should repost them in a different thread.

Trollfever

The other alternative I'm thinking of is working as a sole trader for a while until I can justify paying for a virtual office or a separate proper office as the business grows.

Most small businessess will start in this way, then turning into Ltd when they grow larger.
Good luck.

dkmax_2

wcsoon wrote: »

Rather paranoid of me I know, but I thought it wouldn't hurt - that showed me!

I understand your concern although it may be taken a little too far! I suspect there are many ordinary activities that, if put to the mortgage provider's help-desk for approval, would be prohibited.

As suggested earlier, unless you have agreed to this already by way of a contract, I don't see how you can be prevented from working from home and using your address for correspondence. If you insist on involving them further, and I wouldn't, ask them on what basis they are deciding this.

Many problems are incurred by people doing perfectly legal, normal, everyday things because they have inadvertently or with honest intentions involved people of authority in their affairs.

wcsoon

Thanks for all the useful advice guys, I am going to have a trawl through all the small print and will update when I find out whether or not I'm actually contractually bound to this decision by A&L