Council tax and home business arrangement.

[remerson93]

I do some private music lessons in my home as a way to earn some money. I want to advertise so that I can broaden my customer base but I have been told that if I advertise the lessons, or even the service I provide that the council tax would be increased. Is this true? Or am I able to advertise my home as the place where these lessons would take place?

[boxtops]

I am no expert, but I believe that if you are using part of your home as a registered business, then a proportion of your rates would be business rates.

Have a look here, this looks helpful http://www.businessli...791628&type=RESOURCES

[woofgang]

Its not just advertising that will attract the rate, its doing it anyway...

[tonywiltshire]

boxtops is right, as usual.
If you work at, or from, home, the part of the property used for work may be liable to business rates whilst the remainder of the property will continue to be liable to council tax, although an alteration may be made to its banding.
The Valuation Office considers a number of things when deciding whether or not part of your property should be liable to business rates. These include the extent and frequency of the business use of the room, or rooms, and any modifications made to the property to accommodate that use.
Each case is considered on its own merits, and the Valuation Office may visit your property to check the facts before an assessment is made for business rates. Factors they may take into account include:
· extent of use of the relevant accommodation
· frequency and intensity of use of accommodation
· alterations made to the building to accommodate the business thereby losing the domestic character of property
· whether furniture and equipment are of a kind commonly found in domestic properties
· employees or clients coming frequently or regularly to the premises
· hours worked
· advertisement of business at the premises, that is, a nameplate on the door
· planning permission for building works or use of building being obtained. This is not conclusive but is indicative.

[sinderella]

And then there is the insurance to consider too.

[buildersmate]

Tony has given you a good summary of the factors that are used to determine whether part of your home is being used for business purposes.
Getting into a situation where part of your home is assessed as being for business use is not to be taken lightly; in addition to being asssessed for business rates, you will find that you lose part of the exception to paying CGT on any property value increase when you sell (because principle private residence relief does not apply to the proportion assessed as business use).
Just keep your eyes open to what the impact would be if you do it.