If you are just starting out in your business or start-up journey then keeping operational costs down is likely to be a top priority. And one of the most effective ways you can do this is by setting up your company from home which can help you to keep our overheads to a minimum whilst you get on your feet and work towards profitability.
But can you actually run your business from home? And does it depend on the type of property or business you are running? In our breakdown below, we will give you all the important information you need to know before you consider starting a business from home in the UK.
Can I Run My Business From Home in the UK?
The good news is that it perfectly possible to start running a business from home in most cases. However, before you begin you need to make sure that you have a clear idea of the rules and regulations regarding running a company from and obviously if it is even a viable option.
Landowners Should Check for Any Restrictions on use of their Property
If you own your own house, then setting up a business from home should be a fairly straightforward process. However, before you get started you need to check if there are any restrictive covenants which prevent you from using your property as business premises.
You should check the legal documents you received when purchasing the house, and also use the Land Registry site to check the title to the property.
Check Your Renter or Mortgage Conditions
If you are currently paying a mortgage or rent on your property, then you should also check whether you would be breaching any contract by starting up your company from home. If you have a residential mortgage then you may find that the agreement prohibits you from using the property for business (other than for administration).
If you are a renter, then you should check with your landlord to make sure you have permission before you begin. If you landlord agrees to allow you running a business from home, make sure to request an updated tenants agreement to avoid any problems later down the line.
Can I Run my Business From Home in a Council House
If you currently rent a council or housing association property, then you should contact them to check if you can run a business from home. Whether you can gain permission is likely to depend on the type of company you want to start.
You should also take the time to research whether setting up a business from home from a council home may have an effect on any benefits you receive and the council tax you have to pay.
Do You Need to Check with Your Local Authority?
If you need to make structural changes to your property before running a business from home then you need to consult your local authority before taking any action. You may also need a business licence for certain business types such as guesthouses, B&Bs, and childcare services.
You should also inform the council if your business is likely to receive a lot of customer visits or deliveries. The local council should also be informed if you plan to advertise your business outside after setting up a business from home.
Should I Inform My Neighbours of My BUsiness?
As you can see above, the answer to “Can I run from my business from home”, is likely to be yes in most cases. Although there may be no legal restrictions to starting your business from home, it is worth considering whether your company will adversely affect your neighbours. An increase in noise, deliveries or traffic may upset those near your property, and in some cases could lead to legal action. So depending on the business you plan on running – it might be advisable to inform them. In most instances – unless you have customers visiting your home or you have unsightly equipment and machinery/vehicles outside; then it shouldn’t be of much concern to your neighbours
Will Running a Business From Home Effect my Council Tax?
Your council tax rates may be affected by your decision to start a business from home. You may find that you need to pay business rates for the part of the property you are using to operate your company. Make sure to check with your local authority before you get started.
Can I Run my Business from Home with Home Insurance?
Your current home insurance may not cover the business stock and equipment you store on your property. Make sure to check your home insurance details to see if your business contents are covered, or whether you need to take out more coverage after setting up a business from home.
If your business requires employees or members of the public to visit your property, then you should also consider whether taking out employer’s and public liability coverage is appropriate.
Pros and Cons of Running Business From Home
Now that we have looked at the practical and legal considerations of running your business from home, let’s consider the pros and cons of using your property as business premises. Whether this is the right choice for you will depend on the nature of your business, working style, and long term plans for your business.
What are the Pros of Running Your Business From Home?
- Cut Costs: Running a business from home will substantially cut your overheads. You won’t have to worry about paying rent, insurance, and maintenance on a commercial or business space.
- Potential Tax Deductions: You could potentially claim part of your home expenses as business costs. For example, the utilities, internet costs, and mortgage interest on parts of the property you use for business.
- Convenience and Flexibility: Setting up a business from home can help to improve you work/life balance by allowing a more flexible schedule with no daily commute!
Cons – Can I Run my Business from Home?
- Social Isolation: If you are running a business from home, you may find yourself feeling lonely and isolated. This can start to affect your motivation and productivity long term. Separate business premise will give you more opportunities for networking and social interaction.
- Difficult to Separate Personal/Professional Life: Your home may have many distractions which affect your productivity, these can include family, friends, pets, and household chores.
- Professional Image and Customer Perception: Some potential clients or customers may perceive your home business as being less professional than companies with separate business spaces. If your business involves dealing with clients and customers face to face it is worth considering how you will present a professional image during meetings and sales.
Conclusion: Can I Run my Business From Home in the UK?
As you can see from our answer to “can I run my business from home?” above, running a business from home can be fantastic way to cut overheads for a start-up. However, before you begin setting up a business from home it is important to check the rules and regulation concerning your type of business and property. As well as the legal and practical concerns it is also worth considering whether a home business is the best fit your industry, working style, and business goals.
