Running a business from home is how lots of budding entrepreneurs begin, but you might need to get permission from different authorities before starting out.
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The permission you need to ask for before you can run a business from home depends on the type of property you live in. It also depends on whether you own or rent it, as well as the kind of small business you’re setting up.
What constitutes running a business from home?
Gov.uk says that you’re probably self-employed and running a business if you:
- take responsibility for its success or failure
- have a number of customers at the same time
- make decisions over how, when and where you work
- hire staff to help
- provide equipment to do the work yourself
- complete unsatisfactory work in your own time
- charge a fixed price for your work
- sell goods or services to make a profit (including through websites and apps)
Is it legal to run a business from a residential property?
Yes, but there are different rules depending on the type of property. Here we discuss the rules for running your business from a council house, a rented house, a property you own, a garage and even a shed.
Can you run a business from a council house?
Many councils know that more people than ever want to set up and run a business from home. As some businesses can be started with just a computer, local councils may actively be encouraging people to start their own business.
If you’re thinking about setting up from your council house, it’s likely you’ll need written permission from your local council or housing association, so check with them first. You might need to fill out a form to apply.
Check your tenancy agreement for specific wording that might prohibit you from running a business from your council house. If you ask your council and they do give you permission, you might need to sign another agreement.
Your council may refuse permission if they have reason to believe that your business will disturb your neighbours, or damage your home. They may also refuse if they think that running a business from home will cause a material change in usage of the property.
If you’ll have delivery vans coming to and from your property, visitors constantly arriving at your door, or you’ll be running noisy machinery, you’re probably going to disturb your neighbours. A good example of a business that might cause a nuisance is a car mechanic business, because it involves a lot of noise and vehicles constantly coming to and from the property.
Running a business from a council property may also have implications for the Council Tax you pay and the benefits you receive.
Can you run a business from a rented house?
You’ll need your landlord’s written permission to run a business from a rented house. Check your tenancy agreement, too. If you do get permission, you should get your tenancy agreement changed.
Your landlord can’t ‘unreasonably’ withhold or delay giving permission for you to run a business in the property.
A landlord might refuse permission if they think the let for your proposed business should be commercial instead of residential. They may also refuse permission if they believe your business will cause the property excessive wear and tear, or your business will cause a nuisance to neighbours.
If you run an internet business, you might not want to register or market your business with your rented property’s address. Also, if you’re running an eCommerce business for example and don’t want to give your residential address for return requests, you could sign up for a parcel forwarding service. This also helps you protect your physical location from disgruntled customers and cyber criminals.
Read more about running a business from a rented house.
Can you run a business from a property you own?
Find out if there are any legal restrictions, or ‘restrictive covenants’, on running a business from your home. These covenants may prohibit certain uses of your home.
The property title (held by the Land Registry) will include details of any restrictions. You can also check the documents you were given by your solicitor when you bought the property.
Even without these restrictions, you might cause a nuisance to your neighbours, so have a think about whether your business will disturb homes around you.
According to the law, your business will need to be more than just annoying to be a nuisance. It will need to cause damage to your neighbour’s property or hinder their enjoyment of it – but if the nuisance is severe enough, it could mean a trip to court.
Residential mortgages often prohibit using your home to run a business, so if you have a mortgage, you should check your terms. You may need to get permission from your mortgage lender, as breaching the terms of your loan could result in dire consequences (like making it repayable immediately).
You may also need planning permission if you’re making changes to your home, or if running your business will cause a ‘material change’ in how your property is used. Checking with your local authority is likely to prevent any problems for you further down the line (getting a Certificate of Proposed Lawful Use or Development will confirm you can go ahead).
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 that you’re running a business from may be liable for business rates. You can find out more at the Valuation Office Agency.
Can I run a business from my 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.
Whether you can run a business from your garage will come down to the type of business you’re looking to set up and whether it’ll cause a material change in usage of the property. If your business is likely to cause a disturbance to your neighbours, for example, permission (whether it’s from the council or your landlord) may be refused.
If you own your home, and you’re not sure whether the material use is changing, it may be best to seek planning permission, as we’ve outlined above.
Can I run a business from my shed?
It’s fine to run a business from a shed, but you should get permission depending on the type of property you live in.
Once again, be sure 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 your business expands then you may need to apply for planning permission or a licence.
Do you have any stories about getting permission to run a business from home? Let us know in the comments below.
Looking for self-employed insurance?
With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it’s public liability insurance, professional indemnity or whatever else you need, we’ll run you a quick quote online, and let you decide if we’re a good fit.