Many small businesses are run from home, especially when they’re getting started. Here’s what you need to know about running a business from your home.

Do I need permission to run a business from home?

You may have to inform some bodies of your intention to run a business from home. 

  • Mortgage provider

Even though it shouldn’t require any change to your mortgage – if you have one – it’s prudent to let your mortgage company know. 

  • Landlord

Some tenancy agreements prohibit running a business from home, so if you live in a rental property you need to check your contract. As a matter of courtesy you should also let your landlord know of your intentions. 

  • Local authority

You should only need to contact the local council regarding planning permission if:

  • You intend to make alterations – such as building an extension
  • Your home won’t be mainly used as your private residence
  • Your activities could  disturb neighbours, e.g. increased traffic and visitors, noise, smells.

 

How does working from home affect my insurance?

A standard home insurance policy is unlikely to cover business activity so make sure you take out some additional insurance for things like loss or damage to office equipment or furniture. Normally this doesn’t cost much extra, and it can be covered in a combined domestic and business policy. 

If you’re doing more than simply operating an office from home, you’ll probably need  specific additional insurance. For example:

  • Running a pet grooming service will require additional insurances for care and control of animals; equipment loss or damage; liabilities and indemnities
  • If you welcome associates, clients or customers into your home you should seriously consider having public liability insurance
  • If you keep goods or materials at home you’ll also need additional insurance and perhaps cover for goods in transit
  • If you keep business cash at home you may want to insure this and make sure it’s kept in a safe.

Will I need to pay business rates?

You normally don’t need to pay business rates, if for example you:

  • Only use a small part of your home for business
  • Sell goods via post.

You may need to pay business rates, on top of council tax, if for example you:

  • Convert part of your property to a shop or workshop (e.g. you change your garage into a hairdressers or a car repair workshop)
  • Regularly have customers or clients coming to the property
  • Have employees working at your property.

To find out, contact the Valuation Office Agency (VOA), or if you’re in Scotland, your local assessor.

Contact:

  • Valuation Office Agency (England): 03000 501 501
  • Valuation Office Agency (Wales): 03000 505 505
  • Local assessor (Scotland).

Can I employ people?

You can employ people in your home-based business, but make sure that:

Checklist: Can I reclaim the costs of working from home?

HMRC normally allows you claim part of the running costs of your home in your business accounts. Use the checklist below to highlight the running costs you can claim. Login to save this checklist to your profile for future use - as you work through the list, any checkboxes that are ticked or unticked will be automatically saved to your profile. (To register to join and enjoy the benefits of membership click on the link at the top right of the page. It will only take a few minutes to create your profile).

Next Steps

What types of insurance do I need?

Whatever business you’re in you’ll need to take out insurance. Here’s what you should know about the different types of insurance you may require. 

Read more

Where can I get funds for my business?

Every business needs to have adequate finance. Here’s some information about different sources of funding available for start-ups and small to medium businesses.

Read more

Stay informed

Register or Login to add this article to your reading list.

Share this