Staying legal when you’re working from home

Anyone working from home needs to comply with legislation

Today’s guest post is by Debbie Henderson:

If you’re working from home, then make sure you’re aware of any legal ramifications. Even if you’re employed by a company and working from home on certain days, there are still things you need to make sure you’ve taken responsibility for, including Health & Safety and potential mortgage and tenancy agreement breaches.

But if you’re actually running a business from home, then you have to take your responsibilities extremely seriously, in order to comply with the law. Most people are aware of the need to register with HMRC as self-employed and to make sure that tax is all above board. But did you also know that most regulations that apply to ‘normal’ businesses also apply to home businesses?

MORTGAGE, LEASE OR TENANCY TERMS
If you have a residential mortgage, setting up a business in the house may breach your mortgage terms. It’s also wise to check your lease or tenancy agreement to find out whether there are any clauses prohibiting you working from home.

“Many properties are subject to a covenant that they will only be used for private residential purposes. A solicitor will be able to check the title deeds and advise you.” – Hethertons Solicitors.

INSURANCE COVER
You will need to check this. Most insurers will be happy to add business items to your normal cover for an extra premium, but business assets won’t normally be covered in a household effects policy. It’s wise to also check your buildings insurance to make sure the cover holds if you have a home business. (This recent post looked at the basics of insurance for home business).

DATA PROTECTION
Almost any business will need to register under the Data Protection Act.

TAX IMPLICATIONS
If you need to build an extension to your property for your business, there are tax implications to consider. For example, if you borrow money to help build the extension then the interest would possibly qualify for tax relief. But as that means you’ve identified your part of your property as ‘business premises’ you could run into Capital Gains Tax problems later.

KEEPING STOCK ON SITE
Firstly, you must make sure you’re not breaching any Local Authority regulations. If you’re just converting a room into an office with some furniture and computer equipment, then it most likely won’t be a problem. But if you need to keep stock at home (particularly if that stock could pose a problem) there are likely to be some challenges in a residential area.

PARKING PROBLEMS
When you’re working from home, visits from clients and customers can be a source of contention with neighbours, particularly if parking is scarce in your area. And it’s really important to keep your neighbours happy and informed if you’re working from home.

Make sure you talk to them beforehand and explain that you will make sure parking doesn’t infringe on their spaces/parking needs at any point. Most people are willing to work with you if approached in the right way, and the key part is the timing. If you chat to them well before any problems can arise, you’re far more likely to maintain cordial relations with them.

PLANNING PERMISSION
This is unlikely to be needed if only one room is used for homeworking, it’s only used by people who actually live at the same address and the work doesn’t lead to loads of visitors or parking problems.

HEALTH AND SAFETY
If you’re self-employed you have a duty to make sure your business premises and working environment meets the required health and safety requirements. Check with your local health and safety executive or environmental health department of the local authority to find out what you need to do to comply.

Basically, if you’re unsure, then think about the following questions. If the answer to any of them is yes, then you need to check with your local authority before going ahead and running your business from your home:

• Will your home stop being a private residence?
• Will your business mean lots of deliveries, vans, lorries etc or people calling one after the other?
• Will it involve any activities considered unusual for a residential area?
• Will your business disturb your neighbours at unreasonable hours or create other forms of nuisance such as noise?