Before starting a home-based business
There are some things you might need to check before you start your business from home including:
- if you need planning permission
- get permission from your landlord
- get permission from your mortgage provider
- check your title deeds
- if your insurance covers a business at home
The key test is: how much will running the business impact on your neighbours and the overall use of the surrounding space or environment? What matters is the extent to which there will be an increase in traffic, noise or activity.
You may need planning permission if:
- your home is no longer used mainly as a private residence
- your business results in an increase of traffic or people calling e.g. deliveries to your home affects parking for your neighbours
- your business involves any activities that are unusual in a residential area e.g. using hazardous materials or processing that causes unacceptable noise
- your business will disturb your neighbours at unreasonable hours or create other forms of nuisance
If you're not sure, discuss your proposals with your Planning Authority.
You can submit a planning application online at the e-planning portal.
Independent advice on planning and environmental matters is available from PAS (previously known as Planning Aid for Scotland).
If you rent from a local council or housing association, you'll need to apply to your landlord for permission to run your business from home. You normally do this in writing.
Social landlords normally give permission when it's a reasonable request. If your landlord refuses and you feel it's unfair, you have the right to appeal the decision in the sheriff court.
If you're renting from a private landlord, you can run a business from your home if:
- you continue to live in the property
- your tenancy agreement doesn't stop you from setting up a business
- you notify your landlord and the landlord gives permission
Mortgage contract and title deeds
If you own your home and pay a mortgage, you should let your mortgage provider know that you plan to run a business from home.
Your mortgage provider will want to know about how running a business might impact your home. For example the size of your business may alter the risk-level on the property.
The property is your home, but it's also the lender's security for the home loan.
You should check your title deeds to see if there are any restrictions on running a business from your home.
Get legal advice if you're not sure whether conditions in title deeds could impact on your proposed business. The Lands Tribunal of Scotland can give you more information on whether you could change a condition in the title deeds.
If you work from your home you should tell your home insurance provider. Most home insurance policies don't cover your business activities or items for example stock, computers or customers visiting your premises.
Some policies cover home office equipment up to a certain level, but you may need extra cover for specialist or expensive items.
There's more information about different types of business insurance on the Association of Business Insurers website.
You can find insurance providers on the British Insurance Brokers' Association (BIBA) website.
Flat owners are required by law to have insurance for the reinstatement value (how much it would cost to rebuild using the same materials) of their home. If the property has been purchased recently, an estimate of the rebuilding costs should be included in the home buyers report.