It is possible to run a business from home. However, certain sorts of work are unsuited for the home environment. And as your business grows, you’ll eventually have to invest in business premises to accommodate your expanding operations. But if you’re just starting out on the self-employed path, running your business from home might be your most cost-effective option: A great means of keeping your overheads low while you find your feet.
In this post we’ll take a look at some of the practical and legal considerations of running your business from home. This should help you to decide whether the self-employed life is right for you.
Can You Run a Business from Your Own Home?
While, in theory, it’s possible, the first thing you need to consider is what sort of equipment you need to run your business. If all you need is a computer, a mobile, and an internet connection, then of course you can run a business from your own home.
But if you need specialist equipment, then things might not be so easy. Yet even then, you might find a way. Some beauticians, for example, set up beauty salons in their garages. And if your work relies on you visiting other peoples’ homes or business premises, then there’s no reason at all why you can’t run operations from your home. Though if you employ staff, you might find it more convenient to invest in business premises – unless, of course, you also allow your staff to work from home.
Beyond all of these practical considerations, you might wonder – is it legal to run a business from your own home?
There are no laws saying that you cannot. However, in some rare cases you might have to pay business rates. Business rates are a form of tax the government charges on property that’s used for business purposes. If you only use a small part of your home for your business, you’re probably exempt from business rates. Though if you employ other people to work at your property, or if you’ve adapted any part of your home to provide specialist services, then you may have to pay.
Can You Run a Business from a Rented House or Garage?
There are no laws expressly forbidding running a business from a rented property. But landlords might have some reservations here. They might be concerned that your business could damage or otherwise devalue their property.
The biggest stipulation for running a business from a rented house or garage is that you’ll need written permission from your landlord. There are actually regulations that say that landlords can only refuse this permission if they have a “reasonable” objection. Here are the grounds for reasonable objections:
- If your business operations would require your landlord to change their mortgage, then they can turn down your request. So in short, the property must remain primarily a residential property. You can convert no more than 40% of it for your business needs.
- If your business operations would cause wear and tear to the property, then your landlord can turn down your request. This simply won’t be an issue with many self-employed businesses. But if your business makes use of chemicals or heavy machinery, or if you’re running a pet grooming business from home, your landlord might take issue.
- Will your business cause a nuisance to the neighbours? If so, your landlord can reasonably turn down your request. Again, this won’t be an issue with most self-employed ventures. But heavy machinery, or frequent visitors causing parking issues on the street, could be grounds for your landlord to refuse your request.
So running a business from a rented property is once again a question of who you are and what you do. If your operations will have no impact on the property or the neighbourhood, then your landlord will have no reason at all to turn down your request. If they’re being difficult, though, contact Citizens Advice for some support.
The same rules about business rates still apply, though, and it’ll be you who has to pay them, not your landlord.
Can You Run a Business from a Council House?
There are no laws against running a business from a council house. But you’ll have to get written permission from those who actually own your house. In this case, it will be your local council, or your housing association. Contact them for more information.
The only reason they might refuse your request is if your business operations could damage the property or disturb the neighbourhood. Citizens Advice can help support your case if you feel your council’s being unreasonable.
If you want to run a business from a council house, you’ll still have to think about business rates. Your business might also affect any benefits you receive, and any Council Tax you pay. It’ll all depend on the nature of your business and the specific policies in place at your local council or housing association.
Is Going Self-Employed for You?
Not everyone’s cut out for self-employed work. But if you have the skills and you’re willing to work hard, you’ll find self-employed work to be immensely rewarding.
Thinking about where to run your business is just one of the many decisions you’ll have to make should you go self-employed. We’ve covered many more considerations in our complete guide to becoming self-employed. It’s an essential resource for anyone who’s considering this way of life. As well as looking at the practicalities of your decision, we also take an honest look at the benefits of going self-employed, and some of the downsides too.
How to Register Your Business
Once you decide to go self-employed, you’ll have to register your business.
This is a way of making things official, and ensuring that everything stays above board. You’ll have to let HMRC who you are and what you do. Once they have a record of your business, they’ll know exactly how much to tax you each year.
When you register your business, you can either register as a sole trader, a limited company, or a partnership. We explore what each of these mean, and how to register for each, in our complete guide to registering your business. Find it here.
What Else Do You Need to Consider When Setting Up Your Business?
If you run your own business, you’ll have to put up with a lot of uncertainty. But that doesn’t mean that you have to go without all safety nets. Affordable and flexible insurance will cover you against many eventualities, from personal injury to unavoidable interruption. This way, no matter what happens, you can rest assured that everything will be taken care of.
We offer specialist insurance cover tailored to suit the needs of self-employed people. Our cover starts at 35p a day with no hidden fees, and you can get a free quote online in minutes.