Operating a business from home - considerations

[Deleted User]

I just wanted some general advice. I’m toying with the idea of starting a business and operating from my home. It’s based around my own crafts that I want to go on and sell preferably through an online platform. I don’t own my home, I rent. What would I need to take into consideration? Such as insurance? Permission to do so? Does it affect council tax? Do I need a license?  I just want to get it right and not run into trouble at a later date which is why I don’t want to rush into this. 

JJ_Egan

Business broadband with service level agreements plus a backup dongle etc .

[Deleted User]

Not really related to what I asked but yes I can see the point of having good broadband. 

bris

You need the LL permission who in turn would need to insure the premises for business use. This would have a knock on effect as far as costs to you go. You would probably need your own public liability insurance too.

Council tax may also be affected as you will be using part of your home to run the business so a bussines rate may be applied to part of your home. Thats something only the council can tell you at this stage.

Broadband and phone, well personally I wouldn't bother going the business route for that.

Pennywise

Many rental agreements prohibit the home being used for business purposes, so first thing is to check your lease.
Unless you will have customers visiting your home to view/collect items, or workers working at your home, you're unlikely need to public liability or employers liability insurance.
Unless you have delivery vans regularly delivering/collecting parcels, etc, or customers/workers visiting your home, your local authority is unlikely to want change of use/planning permission.  It's usually only when there is annoyance/potential annoyance to neighbours that local authorities take an interest.
So basically, if it's just you, no workers, no customers, and you're keeping yourself to yourself, then you won't really have any local authority involvement nor insurance worries.
Of course, if you have expensive stock/enquipment at home then you may need business insurance to protect it against theft, fire etc - normal home "contents" policies usually exclude business stock/equipment.

Savvy_Sue

If you're with a social rather than private landlord, you shouldn't unreasonably be refused permission to run a business from home. All the issues Pennywise mentions are relevant however: you may be asked to explain how much impact such use will have on the 'quiet enjoyment' of your neighbours.

Private landlords may have a clause in their mortgage agreement forbidding use of the property for business.

Unless you set one room aside solely for business use, business rates won't be an issue. 

No 'if' about the need to insure your stock properly IMO. I defer to Pennywise, but I'd fear that if you had business stock that wasn't insured as such and had to make a domestic claim, that might be turned down. 

J_B

bris said:

Council tax may also be affected as you will be using part of your home to run the business so a business rate may be applied to part of your home.

This often makes me think.

Millions of folks are WFH this year, I suppose they should all register for business rates to be fully 'legal' - should they?

Talking to 'the man in the pub' yesterday, his wife works from home as a hairdresser. Presumably, to be correct, she should register for SBR?

Minefield!

Savvy_Sue

J_B said:

bris said:

Council tax may also be affected as you will be using part of your home to run the business so a business rate may be applied to part of your home.

This often makes me think.

Millions of folks are WFH this year, I suppose they should all register for business rates to be fully 'legal' - should they?

Talking to 'the man in the pub' yesterday, his wife works from home as a hairdresser. Presumably, to be correct, she should register for SBR?

Minefield!

My understanding is that business rates are only due if any part of your home is exclusively used for business: for example, a spare bedroom converted to an office which can no longer be used as a spare bedroom. So there's an easy way round that: even if there's no longer room for a bed, keep your ironing board in there and use it for ironing. 

 Therefore, if 'the man in the pub's wife WFH as a hairdresser' has converted a room for exclusive business use then yes, she should have registered for business rates, and I really hope she has insurance for her clients visiting the premises, and there may be a CGT liability when they sell the house. 

But if she is cutting hair in a room which is used at other times for domestic purposes, no need. 

J_B

Savvy_Sue said:

But if she is cutting hair in a room which is used at other times for domestic purposes, no need. 

The man in the pub tells me that her salon also has a shower in the corner  - sounds quite domestic to me.

I will pass the message on when I next see him. Thanks

[Deleted User]

Thought I would come back and just give some more information. 
In terms of what's in my rent agreement I will need to check this and see if there is anything mentioned, I'm assuming that if nothing is mentioned I would need to speak to the housing association?
In terms of interference or nuisance, it wouldn't be a business where there would be deliveries or collections or customers coming by to my address, anything that would need posted would be taken to the post office by myself. 
I would not need a specific work room or anything designated for work, it would just be done around the house, in the kitchen/living room alongside my usual daily activity. 

Savvy_Sue

J_B said:

Savvy_Sue said:

But if she is cutting hair in a room which is used at other times for domestic purposes, no need. 

The man in the pub tells me that her salon also has a shower in the corner  - sounds quite domestic to me.

I will pass the message on when I next see him. Thanks

Clearly neither you nor the man in the pub can rely on my advice. :-) Remember, the only advice you can ever rely on is what you've paid for!