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View Full Version : Hobby business from home- is it in breach of 'residential?



jonners99
24-03-2009, 07:53 AM
I am currently renting a flat in Canterbury and have had people asking me if I can help them with their computers. I have now been asked by someone if I can design a website for them for money. I would like to do this but want to make sure it would be ok under my tenancy agreement now and possibly in future. No-one would visit the flat, income would be at most £200 a month and the address would only need to be sent to HMRC for registering self employment.

I obviously need to call my landlord but was looking for a heads up first.

Poppy
24-03-2009, 10:42 AM
Most flat leases prohibit running a business. You'll get your landlord (the lessee) in trouble with the freeholder. Expect to be evicted if you do.

Be honest with yourself. It's not a hobby if you're charging fees, receiving income and registering as self-employed with HMRC.

jeffrey
24-03-2009, 11:19 AM
Most flat leases prohibit running a business. You'll get your landlord (the lessee) in trouble with the freeholder. Expect to be evicted if you do.

Be honest with yourself. It's not a hobby if you're charging fees, receiving income and registering as self-employed with HMRC.
True, but why shouldn't OP simply ask L for consent? Before L gives it, let L verify (in long lease) whether it would breach a covenant.

jonners99
24-03-2009, 11:33 AM
Most flat leases prohibit running a business. You'll get your landlord (the lessee) in trouble with the freeholder. Expect to be evicted if you do.

Be honest with yourself. It's not a hobby if you're charging fees, receiving income and registering as self-employed with HMRC.

Ebay is a hobby and yet you can make money from that... I enjoy web design but its not really sensible or viable to host and run peoples websites for free.

yaf201
24-03-2009, 11:34 AM
If no one is visiting the property and you get a PO Box set up for business post, then are you really running a business from home? Would it require a change of use planning application?

I would guess that these clauses were designed to stop family homes becoming shops, B&B's, motorcycle repair workshops etc. If they're going to stop someone earning an extra couple of hundred quid a month while not causing any alteration to the premises nor disturbance to their neighbours, they seem over prescriptive to me.

Mars Mug
24-03-2009, 11:38 AM
Isn't the ~£2400 an extra income, why do you need to register as self employed? Is this really anything more than someone who occasionally works from home?

jonners99
24-03-2009, 11:57 AM
Its because its an extra income that I would need to register as self employed as its completely seperate from my main job.

Must say I am liking the PO Box idea.

Mars Mug
24-03-2009, 12:04 PM
Don't you simply need to complete a tax return?

Poppy
24-03-2009, 12:10 PM
Please do not take this for granted. You really ought to find out two things:

Does the lease prohibit running a business or breach any other covenants?
If it does, is there a proviso whereby the lessee can ask the freeholder for consent?

jeffrey
24-03-2009, 12:13 PM
Please do not take this for granted. You really ought to find out two things: does the lease prohibit running a business or breach any other covenants? If it does, is there a proviso whereby the lessee can ask the freeholder for consent?
As I said in post #3:
True, but why shouldn't OP simply ask L for consent? Before L gives it, let L verify (in long lease) whether it would breach a covenant.

mind the gap
24-03-2009, 12:19 PM
As I said in post #3:

Sincerest form of flattening and all that?

jonners99
24-03-2009, 13:19 PM
This does not interfere with my tenancy as I never meet clients, most of the work is done in the evenings, I rarely work from home etc.

I would never meet with clients at home, work would be done for 5hrs per week but most of the work would be done at home solely sitting at my computer.

jonners99
24-03-2009, 22:54 PM
So now I am at home here is what it says in my tenancy agreement:

"Not to cause or permit the premises to be used for any profession trade or businesss whatsoever and not to use the premises for any purpose other than a private residence by the tenant."

If no customers visit/post to/call me at my flat and my occaisional use of my computer for web design for 5hrs a week is all the business related stuff that takes place there is it likely to contravene these rather black and white rules?

Mars Mug
25-03-2009, 08:00 AM
If no customers visit/post to/call me at my flat and my occaisional use of my computer for web design for 5hrs a week is all the business related stuff that takes place there is it likely to contravene these rather black and white rules?

I would say no unless you set it up as a business address and start receiveing busuiness post, otherwise no one is likely to know or care that you are making spare cash from what you consider to be a hobby.

Poppy
25-03-2009, 08:55 AM
You really ought to check with your landlord and his landlord (the freeholder).

Reading that clause, the word "whatsoever" is giving emphasis that I do not think you should ignore.

lorenzo
25-03-2009, 10:00 AM
Interesting point.

I run my business from home and have never made a secret of it. LAs have never had anything to say. But there is no staff, no clients that visit or deliveries of product. It's all conducted over the internet. But nobody would ever know unless I told them.

But what about say, an independent inventory clerk who ran the business from their home address?

Likewise, no possible way to affect neighbors via deliveries or clients, apart from hopefully a few extra items of mail containing cheques.

What about tradesmen, dogwalkers, etc?

Surely a great proportion of tenants would be technically running a business from their rented accommodation where LL & LA basically couldn't give a toss.

I can understand the restrictions being valid for say a merchandising operation, or a professional where several clients visit. But in the case of the above and in the case of the OP?

Ericthelobster
25-03-2009, 10:00 AM
I would say no unless you set it up as a business address and start receiveing busuiness post, otherwise no one is likely to know or care that you are making spare cash from what you consider to be a hobby.Yes I know it's not obeying the letter of the agreement etc, but really, given all the details of this particular instance, I really think it would be OK just to keep schtum.

- work is part time and only a few hours per week
- nobody will visit the property
- nothing is being physically done or manufactured etc in the property apart from the OP sitting at a PC

Who's ever going to find out? If you ask the question, you might get an answer of "No", which is not want you want - then you'd be deliberately going against that if you went ahead with it anyway, which might have repurcussions. However, if you just go ahead without asking, I think that if for some reason you did get found out, then you'd be able to argue pretty strongly that what you were doing wasn't actually running a business which was why you felt no need to raise it as an issue.

Lawcruncher
25-03-2009, 11:07 AM
Whether we are talking about planning control or restrictions attached to tenancies, I think it has to be a question of degree and applying common sense. If you work in an office and take work home that is not going to be a breach. No one would expect an author to rent an office to work in. If you run a shop you can do the accounts at home. Taking in someone's ironing and even a bit of childminding are probably going to be allowed, though running a laundry or a nursery will not.

Although lawyers quite like the word "whatsoever" it rarely, if ever, adds anything to the meaning.

jeffrey
25-03-2009, 11:20 AM
Whether we are talking about planning control or restrictions attached to tenancies, I think it has to be a question of degree and applying common sense. If you work in an office and take work home that is not going to be a breach. No one would expect an author to rent an office to work in. If you run a shop you can do the accounts at home. Taking in someone's ironing and even a bit of childminding are probably going to be allowed, though running a laundry or a nursery will not.

Although lawyers quite like the word "whatsoever" it rarely, if ever, adds anything to the meaning.
Whatever...!

Mars Mug
25-03-2009, 11:24 AM
If you ask the question, you might get an answer of "No", which is not want you want - then you'd be deliberately going against that if you went ahead with it anyway, which might have repurcussions.

That was my line of thinking. The person you ask has nothing to lose by saying no, and may take a risk by saying yes, so guess what the answer is likely to be.

Since no one is likely to know about this why does it matter? Also at what point is some form of income considered to be running a business or trade from home? The example given earlier of someone who buys and sells on e-bay is valid isn’t it?

This is not jonners99’s main employment, but needs to be declared for taxation purposes.

As for home working on a regular basis for a company, in my case this can lead to issues. The reason being a room has to be set aside for the purpose and has to have a secure network. This can lead to tax implications if the person claims tax relief for the use of the room, the equipment, heating etc. I don’t see this happening in jonners99’s case unless he starts to claim tax relief for the cost of computer equipment, lighting/heating etc.

jeffrey
25-03-2009, 11:28 AM
Effect on property insurance policy? Unauthorised use= insurer refuses to meet claims.

lorenzo
25-03-2009, 11:33 AM
Effect on property insurance policy? Unauthorised use= insurer refuses to meet claims.

I wasn't buying 5 contracts of soybeans when my computer blew up, I was surfing porn sites! Honest guv'nor!

Ruth Less
25-03-2009, 22:31 PM
Can you find another address for the official business address, I use a family member or you could use an accountant. Then I tell the agent that I work from home but that no one will be visiting the premises so it's just a computer on a table, not had any problems with that.