Running a Business from Home: What You Need to Know

If you’re thinking about running a business from home, it’s often not just a case of setting up shop and getting on with the day to day. There are a number of considerations you’ll need to think about and in most cases, you’ll need to notify either your mortgage provider or your landlord.

Keep reading to find out everything you need to know, including the current laws on running a business from home.

Is it legal to run a business from home?

Overall, it’s legal to run a small business from home, but there may be some restrictions and specific rules depending on your property and the nature of your business. However, if your business causes severe disruption to your neighbours, it will be considered unlawful.

Do I need permission?

If you’re planning to run your business from home, chances are you’ll need to at least notify and possibly be granted permission in order to do so. Take a look below to see who you’ll need to inform based on your living situation:

If you own your home

Sometimes residential mortgages will contain a clause that prohibits your home to be run as a business. If this is the case and you don’t inform your provider, you may face severe consequences (including being asked to repay the outstanding balance instantly). Additionally, your home itself may have some legal restrictions so it’s best to check your deed and the property title on the HM Land Registry.

If you rent your home privately

If you rent your home, you’ll need to contact your landlord before running your small business from home in order to be granted permission. Before doing so it’s best to check your contract as some agreements will state that you can’t use your home for business purposes. The good news however, is that landlords can’t actually refuse or delay given permission without genuine cause. So, unless your business is likely to cause nuisance to neighbours or wear or tear to the home, it’s likely you’ll be in the clear.

If you rent your home from the council

Permissions to run a business from home when you’re renting from the council works similarly to when you do so privately. You may need written permission and you’ll need to check your tenancy to see what the protocol is. However, providing the nature of your business doesn’t cause a disturbance or damage, permission will likely be granted.

Do I need to contact my local authority?

In most cases you won’t need to contact your local authority if you’re going to be running a small business from your home. The only cases you’ll need to inform them is if you need to make alterations to your home, if planning permission is required or if your home will no longer be mainly used as a private residence.

Will I be covered by my home insurance?

Unfortunately, standard home insurance policies won’t cover you for home businesses and you’ll need to take out additional cover. Luckily, the premium generally won’t cost you too much more per month.

It’s worth noting that if your business is more than just an office based one, you may need specific insurance. For example, if you care for animals, you’ll need cover for care and control of animals, liabilities and indemnities and possibly cover for equipment loss and damage too. If you’re expecting customers to come to your home, you’ll need public liability and if you keep goods, this will require specialist insurance too.

Will running a home business affect how much council tax I pay?

It’s possible that running a business from home may affect the rate of council tax you pay. Business rates may be liable for the part of your home you use for your work and in order to determine this, you’ll need to check with your local authority.

That’s our guide to running a business from home and the laws relating to it! Looking for more valuable accounting advice? Check out our article on essential accounting advice for small businesses, next.