Council Tax and business rates: home-based businesses
In England and Wales your local property tax will be either Council Tax or business rates (sometimes referred to as non-domestic rates).
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The local property tax you pay depends on your property type.
Business properties are covered by business rates (sometimes referred to as non-domestic rates) and domestic properties by Council Tax.
Some properties are partly for business and partly for domestic use, so you may have to pay both taxes, eg a pub or public house, or a shop where the publican or shop owner lives on the premises or in a flat above the business.
What if you run a home-based business?
When using your home for minor business purposes, the government does not normally expect you to pay business rates if:
- you use a small part of your home for your business (eg a bedroom – for part of the day as an office)
- you don’t use it to sell goods or services to visiting clients or members of the public (as opposed to selling by post)
- you don’t employ other people to work at the premises
- you don’t make alterations that are not for a domestic purpose (such as converting a garage into a hairdressers, or installing a hydraulic car lift)
These are general guidelines.
Published: 8 January 2015
From: Valuation Office Agency