There are many small businesses being run from family houses and apartments, up and down the country. Obviously we all like to think they are being run legally and safely. Knowing how strapped for cash many new would-be entrepreneurs are at the start of their enterprise, it is quite possible that not all of them are run on the straight and narrow.
For any business run from a domestic house or other property, the mortgage supplier or landlord will need to be advised and give their express permission. If it is expected that alterations of a more major kind are needed to the current building then local planning permission will be needed. The building contractor or project manager should be advising that well before any work commences. The local council needs to be informed if it is anticipated that the business will attract a lot of visitors and parking needed; or deliveries of stock and supplies could conjest local roads. It’s quite possilbe that the new business needs a licence to operate and the local council deals with that.
Another, possibly short sighted, money saving trick by the less savvy entrepreneur would be to opt out of any insurance. This can be a massively costly mistake if the worst happens before trading has been established but development or testing costs have begun. Home contents and buildings cover will not be applicable if runnning a business from those premises. There may well be high cost stock, computers and in terms of people, the much hoped for customer wil also need to be covered. Tax allowances allow sole traders to include their business costs in the annual self assessment tax return. This is also the same if they are part of a business pasrtnership instead. The business owner can claim a portion of things like coucil tax; heating; lighting; phone calls and broadband. There is a calculator for using flat rate to work out simplified allowable expenses. If the property is sold later then there may be capital gains payable. Another not so small matter is paying business rates on the part of the property that is used for the business. This will depend on the local Vauations Office agency and whether they have given a business rateable value to that part of the home. Council ta is still payable on the rest of the property .
