Working from Home – Tax Guidleines

If you work from home, you might run the risk of having to pay council tax and business rates on your property. The local authority has the power to ask the Taxman’s Valuation Office to re-rate your house as partly commercial so the business use reflects and imposes the unified business rate on that part. This hardly ever happens, as most locals do not have the funds or resources to pursue people who work from home, so they never bother to refer cases to the VO.

If your property is re-rated, you have the right to appeal to the Lands Tribunal. In a case a while ago the tribunal decided that business rates could only be imposed on a property if the domestic character of the property is removed by the business use or the property is used for several employees to hold meetings.

It is now clear that if you only use your home for paperwork you will not have to pay any business rates. Just remember not to hold any company meetings at home.