Working from home semi detached house

Working from home

Working from home can affect your mortgage, your home insurance and your tax situation, so it's well worth having a look at a checklist we've prepared before starting

First of all, check with your mortgage lender or landlord to see if it's permitted. In some circumstances, your mortgage or tenancy agreement may prevent you from using your home to run a business.

Got it covered?

Secondly, check with your home insurance provider to see if you need to take out extra insurance. Home insurance policies often do not cover things like stock kept in your garage or computer equipment used for your home business.

Business from home insurance is well worth getting and can cover things such as your contents, public or products liability, business interruption, loss of money, goods in transit and even personal accident cover should you or an employee be injured during a robbery or attempted robbery occurring in the course of the business.

Business rates

The third thing to do is to find out whether your business requires you to pay business rates to your local council. These help to fund local services such as the Police and Fire Brigade.

Your local branch of the Valuation Office Agency (VOA) will tell you if you will be charged business rates for part of your property. The VOA makes a case-by-case decision on whether a home business is liable for business rates and if you are then the good news is you won't have to pay Council Tax for that part of the property.

Taxing issues

The fourth check is to ask the HM Revenue & Customs and an accountant to see what your income, VAT and Capital Gains Tax position is.

If you have set aside a room solely for working in, you may be liable for Capital Gains Tax if the property is sold. But, on the bright side, your business will be able to claim tax relief on domestic bills for the areas of the house used for your business.

In addition, if your business is VAT-registered, you may be able to claim back VAT on articles you buy for business use such as office furniture.

Other checks

Talk to a solicitor to check legal aspects, particular if you are modifying your home in some way. If you are, it is also worth checking with your local Health & Safety Executive or local authority to find out the health and safety aspects of running a home business, and how to do a risk assessment.

You might want to check with your neighbours, to make sure they have no objection to you running your business from home. This is particularly important if you have vans running to and from your house through the day, or are using a noisy or smelly manufacturing process!

If you need to make structural changes to your home, you definitely need to talk to the planning department at your local authority, as you may need planning permission. You must also make sure you comply with building regulations.

Planning to extend?

The top five reasons why you might need planning permission are if:

  • Your home will no longer be used mainly as a private residence
  • Your business activities will lead to increased traffic or parking in a residential area
  • Your business involves any unusual activities for a residential area
  • Your business may disturb your neighbours at unreasonable hours, or create nuisance noises or smells, or
  • You are making major structural changes to your property, altering or extending it.
Small Business Insurance

Last Updated: 04 Nov 2015

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