I have converted my garage into an office for my online business, but a friend told me that I have to pay business rates on that part of my property. Is he right?
The question as to whether business rates apply is dependent on a few variables. Generally, you would not need to pay business rates if you use only a small part of your home for business, for example, a bedroom as an office, or if you sell goods by post.
Business rates are more likely to apply if you sell goods face to face, i.e. a customer comes to your property for the purpose of business. It is also likely to apply if you employ staff at your property or if you've changed your home for the business, for example converting the garage into a nail bar.
As you have converted your garage into an office for the purpose of your online business, it could be argued that this is essentially being used as an office in a similar way to as a bedroom would be used. A lot will depend on the magnitude of the changes you have made. If the changes are merely cosmetic then it is more likely that business rates will not apply. If the public at large do not need to visit your business at all, this would further demonstrate that the property would be deemed to be residential and business rates would not apply.
You must also consider whether there is a restrictive covenant on the deeds of your property which prohibits the use of the property for anything other than residential use. If this is the case then you cannot use the property to run a business from.
Further guidance as to whether business rates will apply can be found by contacting the Valuation Office Agency
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
