Whilst the global lockdown after the outbreak of the Covid-19 pandemic, people around the world are working from home. If you’re running your business from home, this might create an ambiguity in your mind about whether you need to pay business rates or not. Our customers frequently asked if I need to pay business rates if working from home. We’d be answering this question in this blog.
Do I Need to Pay Business Rates If Working From Home?
Generally, business rates apply to commercial premises. You don’t need to pay if you are using a small part of your home for your work like you are using your bedroom for work. Besides, if you’re selling something by post, you don’t need to pay business rates.
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Who needs to pay business rates?
If you are doing the following practices, you are liable to pay business rates and council tax:
- You are using a part of your property for residence and the other part for the business
- You are selling goods and services for those people who are visiting your property
- You are employing people to work on your property
- You have modified your home premises for business. Like you’ve turned your garage into a shop
If you are occasionally using a part of your home (a room) for business purposes, most probably, you are exempted from business rates. As you’re already using it as a living space. However, if you have specified a certain space or room only for business purposes and its main function is to do business activities, you are most likely to pay business rates for it.
Need help! Ask our accountants.
Who will decide?
The VOA will assess each case and decide accordingly. They may also visit your workplace before making an assessment of the business rates. If you are found liable to pay business rates, you only have to pay business rates on the non-domestic part of your home used for business. The business rate will be evaluated based on how much time you utilize and how frequently you use a place for business purposes. While calculating your business rate, your workspace would be considered a non-residential property.
You may Contact VOA (valuation office agency) to know whether you need to pay business rates or not.
Key Takeaway: Self-employed persons can claim their business rates in the self-assessment tax returns as an allowable expense.
Quick Wrap Up:
Hopefully, now you have got the answer: do I need to pay business rates if working from home. So, if someone is curious to know about business rates, just send him the blog’s link as a response.
Still, if there’s any question in your mind, don’t hesitate to ask it with Accotax. We’d love to answer it. Moreover, we’d evaluate your situation and will let you know the rates and taxes you’re liable to pay.
Contact us right now, we’d get back to you soon!
Disclaimer: This blog provides general information on paying business rates.
