Operating a business from home – what you need to know

With many businesses reassessing their requirements for office facilities since the pandemic started, and more companies providing flexible working arrangements for employees, operating a business from home has become a popular choice for many.

If you have chosen to hang up the office keys and work from home instead, in this blog we explain what you need to know about insurance, permissions and tax allowances.

Please note, this blog only applies to those who voluntarily operate a business from home. It does not apply to those who are having to work from home because of the pandemic. If you are unable to attend the office because you have been told to work from home, please read our blog Can I claim back expenses while working from home?

Do I need permission to operate a business from home?

Operating a business from home – what you need to know

Yes, you will need permission from the following people to operate a business from your home:

  • Your mortgage provider or landlord
  • Your local planning office e.g. if you are planning on making major alterations to facilitate your business
  • Your local council e.g. if you are going to have lots of customers or deliveries, you want to advertise outside your property, or if you need a licence to run your business

Do I need insurance if I operate a business from home?

You might need appropriate business insurance if you operate from home. Even if you have home insurance, this might not be enough to cover your business e.g. any stock, computers, visitors to your premises. For more information about authorised business insurers, you should visit the British Insurance Brokers' Association's website.

Will I qualify for any tax relief or allowances if I operate a business from home?

If you are a sole trader or part of a business partnership, you can include your business costs on your self-assessment tax return form. These include claiming a proportion of things like council tax, heating, lighting, phone calls and broadband. You may need to pay Capital Gains Tax on part of your property you used for your business if you decide to sell your home.

Will I need to pay business rates if I operate a business from home?

Yes, you may have to pay business rates on the part of your property you use for your business. However, this depends on whether the Valuation Office Agency (VOA) has provided a rateable value for your home. You can find out more by contacting the VOA on 03000 501 501 (England) or 03000 505 505 (Wales). You might qualify for small business rate relief if your property has a rateable value of £12,000 or less.

You will still have to pay Council Tax on the rest of your property.

Will I need a health and safety plan if I work from home?

Yes. Like any other business you will need to manage health and safety appropriately. More information about this is available on the Health and Safety Executive's website.

If you are operating a business from home and need help with any of the information above, then our team is here to help.  Please give us a call on 01892 559480, or get in touch via our online enquiry form.

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