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.