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  • FIRST POST
    • muddlemand
    • By muddlemand 14th Jan 20, 4:14 PM
    • 144Posts
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    muddlemand
    What to charge for the use of a workshop?
    • #1
    • 14th Jan 20, 4:14 PM
    What to charge for the use of a workshop? 14th Jan 20 at 4:14 PM
    A friend is about to set up selling models he makes - a business he has done in the past and is getting back to. He has asked if he can use a workshop I have - I think of it as the shed, but it has a workbench and is really a workshop or (he says) studio. It is bigger than a shed, probably big enough to garage a car, or nearly (but without that kind of door).

    I've said yes in theory, on condition that he does the setting up - it has lighting but needs heating, and a good clean-up / clear-out. All the one-off costs are his problem. but how much would be reasonable to charge, ongoing?

    I'd prefer to charge a set amount weekly or monthly, rather than keep track of the hours he's there. (He's only just made the suggestion today and we haven't got down to details like which days and so on.) I don't feel it's fair to charge as much as he'd pay for a commercial place. Or would it be fair to? I'm so used to thinking of it as a cluttered, cobwebby space where I never go, it's hard to decide how to approach this.
Page 1
    • Exodi
    • By Exodi 14th Jan 20, 4:28 PM
    • 924 Posts
    • 1,160 Thanks
    Exodi
    • #2
    • 14th Jan 20, 4:28 PM
    • #2
    • 14th Jan 20, 4:28 PM
    If you've always considered it a 'cluttered, cobwebby space', I think it would be, putting it politely - cheeky, to suggest a commercial rate to someone - let alone a friend.

    The price will be somewhere in the middle of 'how much would you need to for it to be worth your time' and 'how much would he be willing to pay for it'.
    Know what you don't
    • deannatrois
    • By deannatrois 14th Jan 20, 4:29 PM
    • 6,593 Posts
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    deannatrois
    • #3
    • 14th Jan 20, 4:29 PM
    • #3
    • 14th Jan 20, 4:29 PM
    Its a large shed he will make into a studio at his own cost. I doubt it will be very warm so if he plans to work in it this time of year, it will need either heating or insulating in some way. Not cheap. Personally I'd charge a minimal amount for six months, then increase it presuming he is making a go of his business. You can have friendly discussions with him about this.

    Surely you can't really be considering charging him a commercial rate? You do realise there is a huge difference between a cobwebby shed and a unit on an estate? One way to lose a friend I suppose lol.

    However, if he is running a business from your shed I wonder if this will have tax implications. I know nothing about this.
    Last edited by deannatrois; 14-01-2020 at 4:32 PM.
    • Ozzuk
    • By Ozzuk 14th Jan 20, 4:39 PM
    • 1,719 Posts
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    Ozzuk
    • #4
    • 14th Jan 20, 4:39 PM
    • #4
    • 14th Jan 20, 4:39 PM
    A few other things to consider (you don't need to answer)...will your mortgage (if you have one) allow a commercial enterprise on the property, will the council allow a commercial enterprise, will your insurance have issues (liability insurance?), will you need to consider the safety risks - fire safety, evacuation etc, will you need to certify electrics, what about your tax position, will your neighbours complain (and have grounds to), do you want someone in your garden at all hours (especially in the summer), what about all the potential deliveries. Lots to think about!
    • comeandgo
    • By comeandgo 14th Jan 20, 4:44 PM
    • 2,897 Posts
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    comeandgo
    • #5
    • 14th Jan 20, 4:44 PM
    • #5
    • 14th Jan 20, 4:44 PM
    Some friend you are. He is about to change an old shed into a workshop probably worth a lot more, at his own expense and you are looking at charging him rent?
    How about you let him use it for a set amount of months at no charge to get his business off the ground and then just charge for the electric. If you charge rent you then have to look at HMRC. In fact if you are charging should you not have electricity safe certification or whatever a landlord has.
    Also your house insurance, does it cover business in shed? Are there any restrictive covenants on running a business from your property?
    • AdrianC
    • By AdrianC 14th Jan 20, 4:53 PM
    • 27,636 Posts
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    AdrianC
    • #6
    • 14th Jan 20, 4:53 PM
    • #6
    • 14th Jan 20, 4:53 PM
    You're two grown adults.

    Sit down, and come to an agreement between you.
    • Bossypants
    • By Bossypants 14th Jan 20, 4:57 PM
    • 1,052 Posts
    • 2,117 Thanks
    Bossypants
    • #7
    • 14th Jan 20, 4:57 PM
    • #7
    • 14th Jan 20, 4:57 PM
    I assume the electricity supply and any other utilities would be in your name? If so I would ask him to cover his use, and maybe give a token fiver to charity in your name or something. If this becomes a serious, longterm arrangement, maybe you can revisit in a couple of years, but right now it sounds like you have a space which isn't worth much in its current form, and your friend is offering to revamp it at zero cost to you, in exchange for getting to use it for a while afterwards.
    • silvercar
    • By silvercar 14th Jan 20, 4:57 PM
    • 39,818 Posts
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    silvercar
    • #8
    • 14th Jan 20, 4:57 PM
    • #8
    • 14th Jan 20, 4:57 PM
    He's a mate, he's tidying it up, he's starting out in a new venture.

    I'd be inclined to let him have 3 months free, other than electric costs. Of after 3 months he decides it was all for nothing you have a mate and a tidy studio/ shed. If it works out then you can sit down and discuss a reasonable rate. It also gives you an opportunity to decide if it is something you want to continue with.

    Is he going to have access to your home to get to the shed? Does this shed have a toilet?
    • muddlemand
    • By muddlemand 14th Jan 20, 5:18 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    • #9
    • 14th Jan 20, 5:18 PM
    • #9
    • 14th Jan 20, 5:18 PM
    Hi @comeandgo, you make me see how much I left out of the question!

    He started the conversation by offering to rent. We met when he bought something I sold on Facebook, I have hired tools to him and similar, so basically a "business relationship" but we have become friends too. He made this suggestion as an offer to pay rent for a space I'm not otherwise using.

    My finances are dire and getting worse; his are not great but on the up. I'm caught in a trap of not being in good enough health to battle the DWP, so I'm eating my savings until they run out which will be in a year or so. (I will keep trying but so far each attempt to claim benefits has affected my health dangerously.) I'm not in a position to say no to money that anyone's happy to pay to me. Whereas he's in good health and was successfully self-employed for years, had some big life changes that ended all that, but is back on his feet and on the point of getting back on his feet financially too.

    I've looked at many possibilities for income without me putting any (or many) hours in, eg renting out parking space, selling things, but no one would pay to park here (a village without even a bus route) and I'm not up to much selling (30 every other month if nothing gets in the way). I'm open to any out-of-the-box ideas.

    I have the feeling he's much more canny than I am, businesswise and moneywise, so I'm cautious each time he asks/suggests something, but so far everything has worked out fair. Frankly I suspect he finds things to pay me for, to help out without appearing to offer charity.

    For the shed, I just want to have an amount in mind before he asks me to name one.

    All he'll do is dust maybe, clear some old furniture out of the way (which is beyond me), tidy up the workbench, and I imagine buy a heater or something so as not to freeze while in there. Hardly redecorating or converting - it's already a workshop. (I just call it "shed" from habit as it was never me that used it.) I do feel it's fair to say any one-off costs should be the user's, don't you?

    I'll be selling the house as soon as pos - not for a year or so, as it takes a lot more "doing" than if i were in good health. They always say don't spend on doing-up as you won't break even on increased value, so I definitely wasn't going to make any improvements, and even if I had been, there are far more important repairs ahead of that workshop.

    I hadn't thought about the home insurance and will consider that (thank you). As i said the idea only came up this afternoon so I certainly haven't thought through the details yet.

    I may decide to tell him just cover whatever extra it costs me, eg however much it adds to the electric bill, any extra on the insurance. But since it was his suggestion, and he's clearly happy to pay me something for it, I'm not going to look the gift horse in the mouth.
    Last edited by muddlemand; 14-01-2020 at 5:28 PM.
    • caprikid1
    • By caprikid1 14th Jan 20, 5:19 PM
    • 957 Posts
    • 1,023 Thanks
    caprikid1
    Ask him what he thinks is fair, he may suggest a price that's more than you want.
    • getmore4less
    • By getmore4less 14th Jan 20, 5:19 PM
    • 38,466 Posts
    • 23,892 Thanks
    getmore4less
    Ask if it is temp to get going or more permanent because it is big enough.

    What is access like?
    • muddlemand
    • By muddlemand 14th Jan 20, 5:35 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    You're two grown adults.

    Sit down, and come to an agreement between you.
    Originally posted by AdrianC
    I don't think there's anything childish about asking a "friendly" group of people more experienced than me, what might be reasonable.
    • muddlemand
    • By muddlemand 14th Jan 20, 5:37 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    Ask him what he thinks is fair, he may suggest a price that's more than you want.
    Originally posted by caprikid1
    Thanks, but I wouldn't know whether it's ridiculously low or ridiculously generous!


    Ask if it is temp to get going or more permanent because it is big enough.

    What is access like?
    Originally posted by getmore4less
    Access is easy with parking next to it. He said initially that it's probably six months to a year while he gets going, but that may be because he knew I'm planning to move (and he may not have realised how far I am from making that real).
    • muddlemand
    • By muddlemand 14th Jan 20, 5:39 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    I was just looking at ads for workshop space to rent around here, but can't see anything as small as this.
    • muddlemand
    • By muddlemand 14th Jan 20, 5:42 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    If you've always considered it a 'cluttered, cobwebby space', I think it would be, putting it politely - cheeky, to suggest a commercial rate to someone - let alone a friend.

    The price will be somewhere in the middle of 'how much would you need to for it to be worth your time' and 'how much would he be willing to pay for it'.
    Originally posted by Exodi
    I have no idea what I'd pay. As I just posted (sorry, hadn't seen your reply then), I have searched for similar to get an idea, but it hasn't given me an idea. As i said before, i may just ask him to cover costs but he seems to expect to pay something. And it isn't me suggesting!
    • need an answer
    • By need an answer 14th Jan 20, 5:42 PM
    • 2,550 Posts
    • 3,213 Thanks
    need an answer
    Why don't you suggest that he pays you a percentage of the sales he makes?
    in S T 1 F 1
    out S 2 T 1 F 4

    2017-32 2018 -33 2019 -21
    • muddlemand
    • By muddlemand 14th Jan 20, 5:43 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    I have no idea what I'd pay. As I just posted (sorry, hadn't seen your reply then), I have searched for similar to get an idea, but it hasn't given me an idea. As i said before, i may just ask him to cover costs but he seems to expect to pay something. And it isn't me suggesting!
    Originally posted by muddlemand
    And it's only cobwebby because i don't go in there, and cluttered with chairs etc that can be moved out - or left there if he doesn't mind them.
    • muddlemand
    • By muddlemand 14th Jan 20, 5:46 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    Its a large shed he will make into a studio at his own cost. I doubt it will be very warm so if he plans to work in it this time of year, it will need either heating or insulating in some way. Not cheap. Personally I'd charge a minimal amount for six months, then increase it presuming he is making a go of his business. You can have friendly discussions with him about this.

    Surely you can't really be considering charging him a commercial rate? You do realise there is a huge difference between a cobwebby shed and a unit on an estate? One way to lose a friend I suppose lol.

    However, if he is running a business from your shed I wonder if this will have tax implications. I know nothing about this.
    Originally posted by deannatrois
    Heating we have talked about and will work out.

    I absolutely am not considering charging as much as a commercial rate, but he wants to pay for the use of it. That's why i am asking - I expected i could find out what a commercial rate would be but I need to decide what feels right in our situation. And (I keep saying this to everyone) it was his idea and he wants to rent it from me! ("He started it!" lol)

    Never said it was a unit on an estate! I thought he was going to work from home, he has bought the kiln and so on, didn't know he wanted more room until just now.

    I think HMRC won't mind but the home insurance might. But i will find out, thanks for the thought.
    • muddlemand
    • By muddlemand 14th Jan 20, 5:48 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    A few other things to consider (you don't need to answer)...will your mortgage (if you have one) allow a commercial enterprise on the property, will the council allow a commercial enterprise, will your insurance have issues (liability insurance?), will you need to consider the safety risks - fire safety, evacuation etc, will you need to certify electrics, what about your tax position, will your neighbours complain (and have grounds to), do you want someone in your garden at all hours (especially in the summer), what about all the potential deliveries. Lots to think about!
    Originally posted by Ozzuk
    I will look into all of these, mostly things I hadn't thought of, thank you. (Fire and evacuation will be fine - it's outside at the back and the only thing next to it is a field!)
    • muddlemand
    • By muddlemand 14th Jan 20, 5:50 PM
    • 144 Posts
    • 25 Thanks
    muddlemand
    I assume the electricity supply and any other utilities would be in your name? If so I would ask him to cover his use, and maybe give a token fiver to charity in your name or something. If this becomes a serious, longterm arrangement, maybe you can revisit in a couple of years, but right now it sounds like you have a space which isn't worth much in its current form, and your friend is offering to revamp it at zero cost to you, in exchange for getting to use it for a while afterwards.
    Originally posted by Bossypants
    That's how i see it except that he's "Facebook buyer" first and friend second - and as for what the space is worth, see my longer replies above - but I see myself as the charity for the token amount to come to - see again my longer replies.

    Anyway, doing a place up when I wasn't going to anyway is like giving me a free horse when I wasn't asking for one. Worth nothing to me.
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