Use your home as a workplace

Before you set up a workplace in your home, you may need to check with some of the following:

• your mortgage lender or landlord/freeholder - further information about using your home to run a business may be contained in your mortgage or tenancy agreement
• your insurance provider, to see if you need to take out extra insurance
• Land and Property Services, to see if you will be charged business rates - see business rates and types of premises
• HM Revenue & Customs and an accountant, to see what your income, VAT and Capital Gains Tax position is
• a solicitor, to check legal aspects
• the Health & Safety Executive for Northern Ireland (HSENI) or your local council, to find out the health and safety aspects of running a work-at-home business
• your neighbours, to make sure they have no objection to you running your business from home
• the building control department of your local council, to see if you need planning permission or to comply with building regulations

Plan for emergencies

Working from home is not generally considered a high-risk area for emergencies. However, you should take precautions in case there is a fire in the home. You should have:

• an adequate warning system - put up a domestic smoke alarm in your work area and check it regularly
• a way of escape - work this out in advance

You could also consider buying a domestic fire extinguisher or fire blanket and keeping a small first-aid kit in your home office - see fire safety in the home.

Certain considerations should be made regarding building regulations and planning permission if you plan to run a business from home.

Planning permission for home businesses

If running your business from home means that the use of the building changes a lot, or the activities that you undertake have an effect on the area where you live, you may need to apply for planning permission from your local council.

You may have to apply for planning permission if:

• Your home will no longer be used mainly as a private residence. This is the key test - has it become business premises first and a home second?
• Your business activities will lead to increased traffic or parking in a residential area.
• Your business involves any unusual activities for a residential area.
• Your business may disturb your neighbours at unreasonable hours or create other forms of nuisance, such as noise or smells.
• You are making major structural changes to your property, altering or extending it.

Building regulations for home businesses

If you need to make structural changes to your home, they must meet the requirements of the building regulations, which are enforced by local councils.

You can check informally with your local council whether your proposed development needs planning permission. For a fee, you can also apply for a formal decision. Find your local council in Northern Ireland.

Business rates for home businesses

You may be able to make minor business use of your home without paying business rates. But if you convert part of your home exclusively for business use (like a workshop), you may become liable for business rates on it. See changing your premises and business rates.

Working from home can affect your tax situation:

• Your business will be able to claim tax relief on domestic bills for the areas of the house used for your business.
• If your business is VAT registered, you may be able to claim back VAT on articles you buy for business use. Reclaiming VAT.
• If you have set aside a room solely for working in, you'll have to work out if there's Capital Gains Tax to pay if you sell your house.

For the purposes of Corporation Tax and income tax furnished holiday properties let on a commercial basis can qualify for tax treatment under the Furnished holiday lettings rules. To qualify properties must be in the UK or European Economic Area and be available for commercial letting to the public for a minimum period. 

Always consult an accountant or HMRC on taxation issues. See choose and work with an accountant.

Paying business rates

Business rates may be payable on domestic premises that are used for business purposes - for example, if you work from home, provide bed-and-breakfast or let your house as a holiday home. See business rates and types of premises.

Estimate your rate bill to get an indication of the rates payable for your business property.

If you use your home as your business workplace, you must carry out a health and safety risk assessment to identify any possible hazards to yourself, workers, visitors and other members of your household.

Identify and evaluate the risks

Possible hazards include:

• using work equipment at home, including electrical appliances
• your workstation set-up
• handling loads
• hazardous substances and materials
• psychological hazards, such as stress or loneliness
• fire
• slips, trips and falls
• excessive noise or vibration

You need to evaluate whether a hazard is significant and, if it is, whether you have taken enough precautions to make the risk as low as you reasonably can. Things to consider include the people who live in your home, the kind of work you do, and the equipment you use.

You don't have to write down the results of your health and safety risk assessment unless you employ five or more people.

For more information see evaluate health and safety risks and decide on precautions.

Using hazardous substances and materials

If you have to use hazardous substances or materials in your home-based business, you should check the safety data sheets or product labelling provided with the materials or substances to find out what specific threats they pose. You will need to make sure that hazardous substances are safely stored and correctly disposed of. For more information see managing hazardous substances.

Protective clothing such as gloves and masks should be worn and windows opened during use to control exposure to the substance.

Even some common substances used in office work, such as glue, can be hazardous in the wrong hands.

The area of your home that you use for work should ideally be completely separate from the rest of your home. It helps if you can avoid being disturbed when you are working. You also want to be able to relax during your time off without being interrupted by work. A spare room with a door that locks or an outbuilding such as a garage or shed is best, so that:

• the risk of accidental damage to your work or equipment will be reduced
• it will help you separate your work from home life enabling you to deal with your clients in a professional manner with minimum distractions
• your work equipment won't be a risk to members of your household
• it will be easier to resist demands from other members of your household

Allocating part of your house as a workplace can have tax and insurance implications. See tax considerations of working from home.

Separate domestic from working areas

If complete segregation of work from home is not possible then partial segregation is the next best option. You could:

• use your office equipment in a general area of the house such as a sitting or dining room
• lock away equipment and work when it is not in use
• consider housing your workstation in a cupboard with lockable shutters or doors

Remember to be very careful about safety and to consider the effects on other members of your household.

Broadband and telephone access

It is a good idea to have a separate telephone line for your business calls. You may also need to consider the efficiency of your broadband access. Other household users may impact the speed of your broadband when you are using it for business purposes. See using home broadband for business.

Coworking and shared office space

A coworking or shared office space might be an option for your business especially if you work alone. This is when you rent a desk space or a number of desk spaces in a business environment. The cost of your desk space usually includes rent, rates, broadband, and use of communal meeting spaces.

Advantages of coworking

Coworking addresses the problems of isolation and distraction that might occur if you work alone at home. Coworking in a professional environment, rather than at home, may give you the motivation to be more productive. Coworking can also be a flexible and cost-effective option with shared resources. It also brings together like-minded business people presenting opportunities for collaboration, support, and networking.

Find a coworking space.

Make sure that your work equipment is safe and that other members of your household, especially small children, can't be harmed by it.

Electrical safety is extremely important and the equipment you use must be fit for the job and checked regularly. Make sure you don't overload socket points.

Setting up the work area in your home

There are many things to consider when setting up your work area if you are working from home, such as:

• equipment must meet basic standards and be properly set up
• chairs should be adjustable to suit any user
• computer equipment should be safe and not affect the user's health
• computer screens should be free from glare and reflections
• workstations must be adjusted to a comfortable position, with the keyboard in the correct position

Security when home working

When working from home, you have to be careful about the security of work equipment and data, particularly if it is sensitive. You should consider the following carefully:

• Is your home generally secured against theft? It may be a good idea to ask a crime prevention officer to look around your home and give advice on how you can make it more secure. See protect your business against crime.
• Have you considered how you will protect your work from other occupants of your home? If you have to share a computer make sure you back up your work regularly and that your work is password protected. See prevent business data theft.
• Do you have adequate insurance? Remember that your general household insurance is unlikely to cover expensive business equipment. See business insurance: the basics.
• Do you have a lockable filing cabinet or safe? It may be wise to purchase a fireproof safe for irreplaceable items.
• Can you dispose of sensitive information in a secure way? For example, sensitive papers should be carefully shredded (preferably using a cross-cut shredder), and not simply disposed of with household rubbish.
• Do you ever transport your equipment or work in public places such as on a train? Equipment should never be left unattended or unsecured in a public place. Also, you should be careful about what is displayed on your screen when it can be seen by unauthorised people.
• How secure are you from cyber crime? You should manage cyber security risks to minimise the threat of attack.

Using your home for business purposes is a common choice for people who just need a small office, or who spend most of their time working at client locations. However, there are advantages and disadvantages of working from home which you should be aware of.

Advantages of working from home

Working from home can have many benefits for you and your business including:

Saving you money 

Save on start-up costs, as you do not need to buy or rent business premises.

Saving you time

Save time that would be spent on looking for suitable business property.

More flexibility

Avoid becoming tied into long-term tenancy agreements.

Family commitments

Arrange work around family commitments.

Help from family

For example, they may help you with filing or general administration tasks.

Minimise travelling time

Save on time and money spent travelling to work.

Fewer distractions

Avoid the noise and distractions of the workplace.

Disadvantages of working from home

However, there are challenges to working from home too. You may find there may be disadvantages such as:

• difficulty separating home and work life
• the initial expense of setting up your business at home
• domestic distractions and interruptions
• isolation/loneliness

See advantages and disadvantages of employees working at home.