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Landlords urged to allow tenants to run home businesses

As part of The Entrepreneurial Audit (a joint project from the RSA and Crunch) twenty policy ideas have been proposed to strengthen self-employment in the UK. One of the subjects tackled in the report is improving the treatment of the 59% of non-employing business owners who operate within their own homes.

If you’ve rented property, you’ll know that landlords often stipulate in contracts that no work is allowed to take place in a property, regardless of whether it’s safe, clean, and quiet. Government Ministers wrote to council and housing association landlords in 2010 telling them they should encourage tenants to set up home businesses, but this new attitude does not seem to have filtered through into many new private tenancy agreements.

Home businesses – What are the rules?

Written permission from the landlord is necessary for a tenant to run a business from a rented property , but a landlord can’t withhold permission without a ‘reasonable’ justification, such as bothering the neighbours or increasing the chances of wear and tear.

The Entrepreneurial Audit argues that the Government should step in to ensure that workers have a right to operate from the properties they rent, as long as they abide by existing clauses, such as those prohibiting tenants from causing a nuisance to their neighbours.

Using too much of the property for business can mean the property is no longer considered primarily residential, and can thus cause legal, insurance, and mortgage complications for the owner of the property. It’s therefore understandable why landlords may be concerned with what the property is being used for.

A tenant running a business at home could also be a raw deal for their landlord if energy bills are included in the rent. However, there are ways around these concerns by restricting the proposed right to only apply to ‘clerical’ type home working. This kind of language is already used by many insurers to cover office workers having work-from-home days without invalidating their home policies.

Making life more simple

As it stands, dedicated workspaces in homes may be liable for business rates, which can mean a property owner must pay this on top of their council tax. The report suggests that council tax and business rates should be harmonised to ensure that home-based workers aren’t paying twice for local services, or choosing not to declare their business premises to the local authority so as to avoid being taxed twice.

While sometimes the devil is in the detail for such rules, everyone (including councils and workers) would benefit from them being clarified.

Have you been in a dispute surrounding your tenancy agreement and your career? What do you think could help others in a similar situation? Let us know in the comments below.

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