Before the last few years, working from home was a relatively foreign concept for many, but people have been running businesses from the comfort of their houses for years and it has become more common across a lot of industries.
If you’re looking to set up a business from home, there are steps you need to take to ensure you’re doing it legally while being as productive as possible. We explore them here.
What counts as running a business from home?
It is not rare to have a small side hustle these days but, what actually constitutes a home business?
You’re running a business from home if:
- Your service has more than one customer at once
- You’re taking on most of the responsibilities for your business
- You charge a fixed price for your service/product
- You’re providing the equipment needed yourself
- You’re selling goods or a service to make a profit (this includes social media, apps and websites)
- You have hired additional staff to help
Do you need permission to set up a business from home?
Running a business from home comes with a plethora of benefits, including being able to work flexible hours without having to go into an office. This gives you a better work/life balance and eliminates the cost of having to pay for office space.
However, you may need to gain permission to run your business at home from either your local council, your mortgage advisor, or local planning office if you’re looking to make changes to your property, should your business affect your home or neighbours.
If running a business from your home is unlikely to cause any disruption or be noticeable to your neighbours or anyone outside the property, it is unlikely that you will need planning permission.
You will however need planning permission if your business meets any of the following criteria:
- Noticeable increase in people coming to your home such as business partners, employees or clients
- A sign outside your property advertising the business
- Storing things related to the business outside of the property
- Significant structural changes to your home
Can you run a business from a council house?
If you’re planning on setting up a business from your council house or need to register one, you’ll need written permission from your local council or housing association in order to do so. You will also need to check your tenancy agreement as it may contain legislation that prevents you from running a business at home.
It is then up to the discretion of your local council as to whether they believe your business will disturb your neighbours or damage your property.
Another thing to note is your business may have implications for the amount of council tax you pay.
Can you run a business from your shed?
It is perfectly legal to run a business from your shed, but you will need to go through the same legal steps as if the business were being operated from inside your home.
As before, you will need to think about whether your business will cause a nuisance to your neighbours or cause a material change in the usage of your property. If you’re running a business from home, planning permission or a licence may be needed if it expands.
Can you run a business from your garage?
There isn’t necessarily anything stopping you from running a business from your garage, but you’ll need to ask permission depending on your type of property, as we’ve outlined above. This is especially important if you have to convert your garage in order to do so.
As before, you will need to think about whether your business will cause a nuisance to your neighbours or cause a material change in the usage of your property.
Can you run a shop from your home?
Running a business from home is one thing, but running a shop is another – luckily for budding entrepreneurs though, it is allowed. It will obviously require a different set-up on your part but, most importantly, as with all home businesses, you’ll need the right planning permission, licence and insurance.
There are also business rates to consider. Typically reserved for non-domestic locations, business rates may be required if part of your property is a shop or you’re selling products to visitors in your home.
A shop at home will mean customers visiting your property, so you will also have to consider how you’ll manage that as to not disturb your neighbours.
Does running a business from home affect your mortgage?
Like any change in your home, it is best to check your mortgage terms before making any radical changes to your property.
You may need permission from your mortgage lender, as breaching the terms of your loan could result in severe consequences, such as making the loan repayable immediately.
You may also need planning permission if you’re making changes to your home, or if running your business will cause structural or material change in your property, or how it is used.
Depending on the type of business you’re running, you may need a licence from your local authority. And remember that running a business from home may affect your council tax, because the part of your home you’re running a business from may be liable for business rates. You can find out more at the Valuation Office Agency.
Should you report a neighbour for running a business from home?
Not everyone will follow the guidelines for running a home business stated above and, especially if your neighbours’ business is disturbing where you live (also known as a statutory nuisance), you have the right to report this.
If your neighbours’ business is breaking the conditions of any licence they have, you can contact your local council to report any statutory nuisance that has occurred. You can also contact the planning or environmental health department for a business that doesn’t have planning permission or one that is causing an issue like noise pollution.
If the matter can be resolved by politely talking to your neighbour, we would recommend that, but if you’re not sure how to approach the situation, you could also contact your local Citizen Advice Bureau.
What insurance do you need to run a business from home?
During the pandemic, most home and contents insurance policies extended their cover due to the nature of people working from home. However, as the UK returned to normality, policies wouldn’t cover you if you met any of the above criteria while creating a business from home.
If you have clients or customers visiting your home for work purposes you will need public liability insurance, along with employer’s liability cover if you have employees working on your property. Business cover is also vital if you are storing important equipment, documents or stock.
Check your home business insurance
Of course, it is important to check with your insurance provider as to which coverage you will need.
As one of the leading specialist home insurance brokers in the UK, Adrian Flux compares quotes from over 30 schemes to source competitive buildings and contents insurance for any situation, including those who run a business from home. We can then offer affordable home business insurance that’s tailored to your needs.
Call us on 0800 369 8590 for a quote or book a callback at a time that suits you.
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