Running a business from home – do you need permission?

What constitutes running a business from home?

The government website 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)

Can you run a business from home – is it legal?

It’s legal to run a business from home, 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?

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 prevent 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.

If you do meet the running a business from home council rules and they give you permission, you might need to sign another agreement.

Why would a council refuse you permission to run a business from home?

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.

For example, if you’ll have delivery vans coming to and from your property, or you’ll be running noisy machinery, you’re probably going to disturb your neighbours.

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.

Why would a landlord refuse you permission to run a business from home?

A landlord might refuse permission if they think the rental agreement 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.

As an alternative, you could sign up for a parcel forwarding service if you don’t want to give your residential address for return requests.

This also helps you protect your physical location from disgruntled customers and cyber criminals.

Read more about running a business from a rented house.

And if you’re a landlord wondering about whether your tenant can run a business from their rental property, we have a guide for that too.

Can you run a business from a property you own?

It’s important to 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.

Will running a business from your property affect your mortgage?

Residential mortgages often stop you from 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).

Do you need planning permission to run a business from home?

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.

If you do choose to work from your garage, make sure you read our tips for setting up the perfect home office space.

Can I run a business from my shed?

Working from a garden office is a great way to separate your work life from your personal life when you run your business from home. It’s fine to run a business from an office 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 you’re running a business from home, planning permission or a licence may be needed if it expands.

Do I have to pay business rates if I run my business from home?

Most home businesses won’t be required to pay business rates. However, you may need to if you’ve made changes to your property to run a business. At the same time, you could be liable for business rates if you employ people at your home. 

Read our detailed guide to business rates for more information.

Do I need a licence for my home business?

You won’t need a specific licence for running your business from home. 

However, there are certain trades that require you to have a licence whether or not you work from home. These include: 

• dog breeding
• childcare
• ear piercing
• importing and exporting goods

Do you need insurance for running a business from home?

If you get the permission you need to run a business from home, it’s highly likely you’ll need some insurance.

Having business home insurance can give you the protection and peace of mind you need to kickstart your company.

There are different types of business insurance you may need. For example, if you run a hairdressing business from home and you employ staff, it’s likely you’ll need employer’s liability insurance.

Meanwhile, if you operate a PR business from your home and you offer advice to clients, you’ll probably need professional indemnity insurance.

A home business, such as a cake and baking business, is likely to need public liability insurance as you’ll be in contact with members of the public.

Read our guide to the type of business insurance you’ll need to make sure you’re covered.

Running a business from home ideas

You may be keen on the idea of running a business from home, but not sure what kind of business to start.

Here are some of the most popular home business ideas:

• home baking or food
• clothing brand
• craft business
• cleaning
• personal training or yoga

Read our guides on the best UK small business ideas, trending business ideas, and how to start a home business for further inspiration.

Once you’ve decided on the type of business you want to launch, our business name generator can help you pick a name.

If you’re not sure whether working from home full-time is for you, it could be beneficial to adopt a hybrid working model.

Do you have any stories about getting permission to run a business from home? Let us know in the comments below.

Small business guides and resources

• Do I need a PayPal business account?
• A guide to bookkeeping for small businesses
• A guide to self-employed tax rates
• What is payment on account?

Photograph: Jacob Lund/stock.adobe.com