Partner's business registered at my address... implications?

KLB

I had no idea where to put this question so apologies if it's in the wrong place...

I live with my boyfriend who has a small business which is registered at our address. The house is in my name only with no mortgage. I'm not involved in the business in any way. I've no idea if there are any implications or any potential comeback on me if any problems arise.

On top of that, we have an outbuilding which we're converting into a workspace which he will use so that he can work from home and develop his business. Some of the conversion is specific to his business but most of it is general (insulation, windows, etc). The work being done will be good for me in the long run if ever I decide to sell.

He said he wants to put some of the work through his company books. Can you advise if this is a legit thing to do? Does it tie his business to me/my house in any way that might cause problems somehow?

Can you also let me know whether if his business ever got into trouble, it would affect me in any way? For example, he has a business loan which he's paying off, I assume this isn't connected to my house or myself in any way?

When it's up and running, we will obviously sort out specific insurance etc.

Thanks all. I've never had my own business, so no idea how it works.

Emmia

Is he contributing rent etc.? or is it just share of bills?

If he/his business contributes to the cost of renovations to your outbuilding then I suppose that could give him a beneficial interest in your property - if you split you may need to pay him off in some way.

lincroft1710

A business does not need to have its registered office at the owner's home or workplace, it can be at their accountant's office, or even an accommodation address. Is the business a limited company? If not and he gets into debt then you may have to explain to bailiffs what is yours and what is his.


Has he got planning permission for using the outbuilding for business purposes. As he is using part of your property (and may be paying for the conversion), you really need some legal document setting out the arrangements between both of you, especially if you split up.


You really should be sorting out insurance etc now, rather than when the business is a going concern

pbartlett

If the business is a limited company then that address will be what is registered at companies house and will be searchable and free for everybody to see

if it is not a limited company then as above - if ever there any debts you will need original receipts and proof to show that everything in the house is yours otherwise they are liable to be seized by, for example, the bailiffs. 

Don't expect to be able to tell them 'Oh it's all mine nothing to do with the business' because they will need solid proof.

That goes for any cars parked on the drive as well of course - you can show them the log book yet they will need original receipts showing the car purchased in your name otherwise you risk it being impounded

all this of course if there's ever any debt. 

J_B

pbartlett said:

If the business is a limited company then that address will be what is registered at companies house and will be searchable and free for everybody to see
 

We run a Ltd Co from home - the registered office is our accountant's address, so, what you say isn't correct.

martindow

J_B said:

pbartlett said:

If the business is a limited company then that address will be what is registered at companies house and will be searchable and free for everybody to see
 

We run a Ltd Co from home - the registered office is our accountant's address, so, what you say isn't correct.

I don't think there is an error in pbartlett's post or a conflist with your situation.  Whatever address is used at CH will be publically visible be it an accountant, business premises or a private house. 

In any case I suspect that the OP's partner's business is not registered as a company judging by the rather casual way in which it is being started.

KLB

Thanks all, it is a limited company so no worries re possible future debt. He's had the company for years and we've moved to a new house, which is why it's being registered at home.

He doesn't pay rent as I don't have a mortgage, just contribues to the bills.

Am I right to assume, if I pay for the work on the house, it can't go through his company? It would have to be his money and he'd have to show it as such in order to go through his books?

Annisele

I wonder if the outbuilding conversion would affect OP's tax position? I'm not at all an expert on this - and so might be entirely wrong - but if part of OP's property is used for a business, I'm not sure OP would be able to fully benefit from capital gains tax exemptions if she sold her house. (I'm thinking of the 'mixed use' stuff here.)

I'm also not sure if there would be any business rates implications of what looks to be a change of use (assuming planning is fine).

KLB

Also.. .I didn't know that I would have to get planning permission. Is this the case if my partner is working there? If it were just converted into an office space for personal use, do I still have to get permission? 

KLB

Would my property be classed as mixed use then? It's not a shop or anything like that, no customers or clients coming and going.. basically my partner fixes stereos, etc so he would be doing that there, at the moment he's doing it in the spare room. Thanks

Annisele

I'm not an expert, so don't rely on what I say here. But I think, in general, that you don't need planning permission for stuff that is "incidental to normal residential use". So, if I use one of my bedrooms as an office, nobody cares. But if I convert the ground floor of my house to a shop and have customers coming and going at all hours, lots of people would care.

I think that fixing stereos in a spare room would probably be fine. You're mostly using your house as a residential house, so I think that's unlikely to be an issue. But if he's drilling for 7 hours a day and annoying the neighbours, you might end up with a planning complaint as well as a noise complaint. (Although there's lots of stuff in planning that really boils down to "are you annoying the neighbours". If you do something for ages without anyone complaining, then you usually get to keep doing in even if you should have had permission to start with. But I don't know enough to comment on how long is "ages", or what the exceptions are to "usually".)

With an outbuilding, if part of the conversion is specifically for your boyfriend's business it gets a bit harder to say that that building is being used in a way that is incidental to normal residential use. I don't know if it would be impossible, but it's certainly something you should think about. Hopefully somebody else will be able to come along and give you much better pointers than I can.

When you're asking about whether the cost of the work could "go through his company", are you meaning "could he offset the costs against his/his company's tax bill"? If so, then he certainly won't be able to offset money you've paid out against his company's tax bill. But even if the company pays, it could only offset the costs against tax if the work was wholly and exclusively for the purpose of his business. That might put you into a bit of a trap - I think it would be difficult to argue both that the work was wholly and exclusively for the business and that the work created something that was mainly for residential use.

In his shoes, I'd also be worried about spending my / my company's money on any kind of improvement to your house. What happens if you split up? Do you get to keep the improvements? On the flip side, in your shoes I'd worry that he'd be able to show that he (or his company) had some kind of beneficial interest in your property, and he'd be able to make you sell your property so he could get his money.

There's also potentially an insurance concern for you now. Buildings and contents insurance for homeowners doesn't always cover business use. If your partner manages to burn your house down while fixing stereos, would your insurance cover you? (I don't mean to panic you - the policy you've got might well cover you - but much better to check _now_ than when you're looking at a smoking ruin.)