With the rise of flexible working it’s becoming more common for people to work from home or to start businesses from home. In a lot of cases, if the business use of your premises is unsubstantial, you may need to inform your council or get their consent.
However, if all or a substantial part of your home is to be used exclusively for business purposes, you may need to pay Business Rates, not Council Tax, on the relevant parts. Detailed information on business rates from the government pages can be found here. (This page also contains links to whom to contact if you live in Scotland or Northern Ireland.)
Further, if all or part of your home is to be substantially used for business purposes, the Local Authority may consider that you are breaching planning control. This is the key question: is it still a mainly a home or has it become a business? If it has become a business, then you are likely to need planning permission and you’ll be liable for business rates. Depending on the extent of the business use, and in particular its effect on the area, the Local Authority may try to stop you from continuing, or suggest you need to apply for a change to your existing permission, which may or may not be forthcoming. Be aware that your neighbours may strongly object to what you are doing and report your business activities the Local Authority.
Planning permission may be needed if running your business from home causes:
- A nuisance such as noise or smells
- An increase in traffic or people coming to visit
- Disturbs neighbours at unreasonable hours
- Where your home is no longer used mainly as a private residence.
We’d also suggest that you check the wording of your current mortgage (if any) as it may specifically state that you cannot run a business from home.
A standard domestic building insurance policy is likely to say you are not to run a business from home. For example, if you are running a food preparation business from home, and there is a fire, you may have invalidated your insurance and, therefore, may not be covered.
Finally, check your title deeds. There may be restrictive covenants that state you cannot run a business, or certain types of business, from the premises. If so, then interested parties could potentially seek an injunction to prevent you from continuing.
In a recent Planning Inspectorate case a lawful development certificate was refused for "use as childminding services within existing dwellinghouse". The inspector stated that the main consideration was whether, as a matter of fact and degree, the use as a childminding service resulted in a material change of use from a dwellinghouse (Class C3) to a mixed use comprising dwellinghouse and childminding service or whether the secondary use was part and parcel of the main use of the site as a dwellinghouse.
Up to six children attended for three and a half days a week. The Ofsted regulated licence permitted up to nine children. Operating hours were usually Mondays, Wednesdays and Thursdays between 9.30 am and 4.30 pm, Tuesdays between 9.30 am and 1.30 pm and Fridays 9.30 am to 12.30 pm (or 1.30 pm during winter months).
The business owner stated that when the nursery was not open, the main childminding room reverted to normal residential use, and in the morning room/kitchen, toilet and outdoor decking were not used exclusively for childminding purposes but were also used for ordinary residential purposes.
The inspector stated that the key test was the extent to which the use resulted in a notable change of character of the property. While the use had not fundamentally changed the character of the residential property, its use had changed to a degree. Part of the ground floor had been set aside for the childminding use and other parts of the ground floor and the rear garden were also used for childminding services. The effects of any potential increase in traffic movements and on-street parking might be amplified owing to the property's location at the head of a cul-de-sac. The noise levels resulting from the use of the rear covered area and garden were likely to be increased from the childminding use. The child-minding also materially altered the way in which the ground floor of the property functioned.
Although the inspector was not aware of any complaints from neighbouring residential properties, the use as childminding services within the existing dwelling would constitute a material change of use from residential to mixed use residential with childminding services. This material change of use constituted development for which planning permission was required.
Again, this is quite a nuanced area of the law, and where appropriated specialist advice may be required. There is, of course, a blurred line between when planning permission is and isn’t required that will be very much fact specific to each individual case, rather than being able to apply a “one size fits all” approach.