Can You Run a Limited Company from Home?

Thinking About Running Your Business from Home?

Hey there! If you’re a contractor or freelancer in the UK, you’ve probably wondered: Can I run my limited company from my own home? You’re definitely not alone—keeping costs down while building your business is a smart move. But before you turn the spare room into your new HQ, let’s break down what you need to check so you stay on the right side of the rules (and your neighbours).

What Should You Check Before Getting Started?

Here’s a quick checklist of what we’ll cover:

• Owning your home: restrictions and covenants

• Being a considerate neighbour

• Mortgage or rental agreements

• Planning permission

• Council tax and business rates

• Rented or council properties

• Using a garage or shed

• Insurance needs

Let’s walk through these one by one.

1. Do You Own Your Home? Read the Small Print

Before you get too excited, check if there are restrictive covenants on your property. These are rules written into your property’s title, sometimes saying you can’t use your home for business purposes.

• Your solicitor should have provided you with these details when you bought your house.

• If you’re not sure, you can check via the Land Registry.

In reality, loads of people work from home today, especially for low-impact businesses like contracting or consulting. Enforcement can be patchy, but it’s best to know where you stand.

2. How Will Your Neighbours Feel?

Consider how your business might affect your neighbours. Even if you’re in the clear legally, extra noise, deliveries, or visitors could ruffle feathers.

• If neighbours complain and it disrupts their enjoyment of their property, you could face legal headaches.

Pro tip: Have a quick, friendly chat with your neighbours about your plans. It’s amazing what good communication can prevent!

3. What Does Your Mortgage Say?

If you have a mortgage on your home, double check the terms. Many residential mortgages don’t allow business use, or they require you to get the lender’s consent first.

• Using your home as a business without telling your lender could breach your contract.

• For most IT contractors or freelancers, working quietly from a desk won’t worry most lenders. But it’s always best to ask.

4. Do You Need Planning Permission?

If you’re planning to make structural changes (like converting a garage or putting up an extension), or your business will significantly change the way your home is used, you might need planning permission.

• Some types of business also need licenses (think childminders or B&Bs).

• For guidance, visit your local council’s website or check the Planning Portal.

“For most contractors, if you’re just working from a laptop at home with no extra noise or traffic, planning permission likely isn’t needed. But if in doubt, check!”

5. Will You Owe More Council Tax or Business Rates?

Running a business from home can sometimes mean you owe business rates on the part of your property you use for work. Usually, this only applies if:

• You’ve converted part of your home (like a whole room or garage) and it’s used mainly for business.

• You regularly have staff or clients visiting.

For most home-based contractors using a small area, this won’t make much difference. But always check with your local authority.

Want to know more about expenses? Check out our guide to using your home as an office.

6. Are You Renting or Leasing?

If you rent your home, check your tenancy agreement. Most require you to get your landlord’s permission before running a business from the property.

• If your landlord agrees, get it in writing and, ideally, update the rental agreement.

• Landlords can refuse if they think your business will cause excessive wear, disturb neighbours, or require a change from residential to commercial use.

If you think your landlord is being unreasonable, you might need to seek legal advice.

7. Running a Business from a Council House

If you live in a council or housing association property, you need to ask their permission to start a business at home. The council can refuse if your business might:

• Cause a nuisance to neighbours

• Lead to extra wear and tear

Running a business from a council home can also affect your council tax or benefits, so check with your local authority.

8. Using a Garage or Shed as Your Office

If you’re thinking about setting up your office in a garage or garden shed:

• As long as you don’t make major changes or cause a nuisance, you’re usually allowed to go ahead.

• If your business grows, expands, or you add signage, you might need planning permission or a license.

Always check with your local council if you’re unsure.

9. Insurance: Cover Your Bases

Your regular building and contents insurance might not cover business activities. Here’s what to review:

• Tell your insurer you’re planning to run a business from home.

• You might need a new policy or an add-on to cover business equipment or stock.

• If you have clients or staff visiting, consider public liability insurance.

• Other useful policies: professional indemnity, income protection, tax investigation cover.

This isn’t just red tape—it’s about protecting yourself if anything goes wrong.

Troubleshooting: Common Issues & Solutions

• “My mortgage says no business use!” – Contact your lender. Some allow low-impact businesses with written consent.

• “My landlord won’t agree.” – Try explaining your business type and reassure about minimal impact; if refused, get legal advice.

• “Neighbours are unhappy about deliveries.” – Offer to redirect deliveries or limit them to certain times.

• “Council wants to charge business rates.” – If you use only a small area, appeal or provide evidence of minimal use.

Wrapping Up: Take Action Before You Set Up Shop

Setting up your limited company at home is totally doable for most UK contractors. Here’s a quick recap:

• Check for property restrictions and get the right permissions.

• Keep neighbours in the loop.

• Review your mortgage, lease, or council housing terms.

• Check if you need planning permission or a business license.

• Ask your council about tax or business rates.

• Update your insurance to cover business activities.

For official government guidance, visit the GOV.UK business from home page.

Next steps:

• Review your property documents.

• Have a friendly word with any relevant parties.

• Update your insurance.

• Get set up and enjoy the perks of working from home!