As professional accountants in Peterborough we are asked lots of questions. With the changes due to COVID lockdown a common question we are currently asked is if Peterborough businesses need to pay business rates when working from home. Our clients want to know if they have to pay council tax for a home office being used, as well as their business rates.
Currently, if you work from home you may become liable for business taxes for the part of your home that you use for work purposes. This could be your kitchen, the spare room that is now an office, or an outbuilding that you have temporarily converted into a home office. In addition to this, council tax is also payable on the domestic parts of your home.
That said, it is dependent on how often you work from home and how long you are working from home. It is also dependent on what else you are using your home office for. For example, if any modifications or changes have been made to your home to accommodate work use in that area.
While there are currently very confusing rules around this, we can confirm the following.
It is very likely that you will have to pay business rates if your property is part business and part domestic. Common examples of this are beauty treatment rooms at the front of your property and your home at the back, or if you live above your office or shop.
It is also likely that you will be required to pay business rates if you are a Peterborough business that sells goods or services to people who visit your property. The same is thought if you employ other people to work on your business from your property.
You will also be required to pay business rates if you have made changes to you home to suit your business. For example, converting your spare room into a shop or converting an outhouse into a hairdressers or nail salon.
If however, you use a small part of your home for your business, for example, the kitchen as an office, but later cook and eat in there, then you will not be required to pay business rates. If you are a business selling goods via the post, you will also not be required to pay business rates.
If you have any questions about rates for your Peterborough business, please call our Peterborough Accountant Team. We will happily discuss your individual situation and help you understand what rates and taxes you will need to pay.
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Direct Peak provides a dedicated business tax accountant, who will prepare your annual accounts and tax returns. They will be on hand to answer any tax queries you have.
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Your business tax accountant will ensure that the company is set up in the most tax-efficient way and that you are claiming for all the correct expenses to maximise your earnings.
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We aim to turn around the annual accounts and tax returns quickly to give you visibility of your tax bill well in advance of it being due.
Do Peterborough Businesses Need To Pay Business Rates When Working From Home
When managing a business with remote or home workers, it’s important to establish effective strategies and systems to ensure productivity and maintain a cohesive team. Here are some top tips to consider:
- Clear communication: Establish open lines of communication and set expectations for how and when communication should take place. Leverage various tools such as email, messaging apps, video conferencing, and project management platforms to facilitate effective communication.
- Set clear goals and expectations: Clearly define work goals, deadlines, and performance expectations for your home workers. Ensure they understand their responsibilities and have a clear understanding of what is expected of them.
- Provide the right tools and resources: Equip your home workers with the necessary technology, software, and resources to perform their tasks efficiently. This includes hardware, reliable internet connections, project management tools, and collaboration platforms.
- Regular check-ins: Schedule regular check-ins with your remote employees to review progress, address concerns, and provide feedback. This can be done through video conferences, phone calls, or even brief daily check-ins via messaging apps.
- Foster a sense of belonging: Implement initiatives that foster a sense of community and connection among remote workers. This can include virtual team-building activities, informal online gatherings, or even occasional in-person meetups when feasible.
- Encourage work-life balance: Help your remote workers maintain a healthy work-life balance by setting clear boundaries between work and personal life. Encourage regular breaks, discourage overworking, and promote self-care practices.
- Trust and autonomy: Trust your home workers to get their work done effectively without micromanagement. Provide them with the autonomy to make decisions and take ownership of their work, while ensuring they understand the overall goals and expectations.
- Establish a remote work policy: Create a comprehensive remote work policy that outlines guidelines, expectations, and procedures for remote employees. This document can serve as a reference point for both managers and home workers.
- Invest in employee well-being: Consider implementing wellness programs or initiatives to support the physical and mental well-being of your home workers. This can include wellness challenges, mental health resources, or access to online fitness classes.
- Continual improvement: Regularly assess and evaluate the effectiveness of your remote work arrangements. Seek feedback from your home workers and make adjustments as necessary to improve productivity, collaboration, and overall satisfaction.
Each business and team may have unique requirements and circumstances, so adapt these tips to suit your specific situation.
