Requirements renting an office rather than a room?

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bella-donna

SaharL
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Hi All,

I work from home and I am looking to expand. I live in a London borough and currently have to have a special treatment license for some of the treatments I offer.
I have found an office that Id like to rent to do my treatments, train students and possibly sublet one of the rooms to another therapist. The building is more like a bungalow and has a kitchen bathroom and additional private room. The whole building is private and will be solely rented to me. I am looking into the requirements I need in order to make this happen and just wanted to see if anyone else has done this and what exactly needs to be covered. Any advice would be much appreciated
My questions are;
Do I need to get a special treatment license?
Do I need to change the purpose of the use of office?

Also is there a group or organisation that can provide professional advice relating to these kind of questions, like solicitors, accountants, beauty regulation advice etc?

TIA x
 

TheDuchess

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Hi Bella-Donna

sorry for the late reply, I don’t come here often. To answer your question, I have done this.

Special treatments license - ask the local Council, they make the rules.

The planning rules over change of use have changed recently, again this is a question for your Council. Where I trade the Council is very chilled and doesn’t ask beauty salons to obtain a special treatments license and allows us to trade as if we are hairdressers (in a shop) or as a consulting offices. This is now planning category E (the categories were changed in Sept 2020).

However beauty and massage actually come under Sui Generis which means that you do need a change of use. You should talk to your local Council. Also you need to talk to your landlord because changing the use affects how the property can be let in future. Usually you try and keep the existing classes of use and just add another class of use. You want to stress that you will also have an administrative office and will be providing professional services or health services and educational and training services. Being a member of the CNHC will help establish your credentials.

You might want to use a commercial surveyor (not every surveyor does this type of work) or a solicitor. Both will tell you they can give you the best advice. The commercial surveyor will be more practical, the solicitor will worry more and ask detailed questions. Sometimes they stir up problems - I had a London solicitor practise who didn’t understand that my local Council didn’t need me to obtain Sui Generis and they got terribly fussy and I had to be quite firm with them. You need to ask whether your professional has represented clients who have done this in your local Council area. It matters because they might need to quote examples of other similar businesses.

The best organisations are probably the National Hair and Beauty Federation and the small business federation. Your local Council may also offer free mentoring and business support services so try them first. The NHBF offer industry specific advice, the FSB offer free banking and insurance cover not offered with most beauty policies so membership can pay for itself.

If you are inexperienced it’s particularly important to have a good relationship with your accountant. There are several National accountancy practises that specialise in beauty, including salon frog that posts here. A local accountant, with other beauty/hairdressing clients, might be able to suggest other professionals with local knowledge that you can use. My accountant is a font of knowledge and shares an office building with a commercial surveyor.

There are also booking software systems that offer you hair and beauty management advice and training. It would be sensible to have an accountant familiar with your booking software. Finally there is something that you need to know about called Making Tax Digital. HMRC are getting more and more up to date and they expect small business owners to be able to work out their VAT themselves and have bank accounts that create all the necessary reports. Once you learn about everything you can actually save yourself a lot of money on accountant fees. A good accountant will suggest the right bank account, bookkeeping software and MTD reporting system for you and get everything set up so end of year accounts are a doddle.

One word of advice. It isn’t worth going over the VAT threshold unless you are going to turn over at least £140/£150K a year. Talk to your accountant about this. The worse thing you can do is turn over around £100k, - loads of hassle, admin and accountancy bills when you should have just closed for a month and taken a holiday! I know a pub that has slimmed down their business to become a non food BnB operation with the pub open, very quietly, just four nights a week. “I’ve been a busy fool” says the landlady. She’s deregistered for VAT and she says she’ll never go back into VAT registration again.

I deliberately planned not to exceed the VAT threshold by setting up my business as two distinctly different businesses. I’ve worked with my accountant to make sure he’s happy. As long as you start right at the beginning - maybe with a limited company and being self employed within your business rather than an employee, you can do it legitimately. You have to weigh up though whether you can manage to keep it up, because if the purpose of the business separation is tax avoidance it’s actually fraud. You need to say “this business is going to be sold/may become a partnership, while this other business is me doing my thing”. There are other arguments, like saying educational training services are not liable for VAT so my school has to be is a separate business so that students don’t have to pay VAT on their training. - but run this past your accountant first.

hope this is helpful and that everything is going well so far. Your proposal sounds very interesting and I look forward to hearing more about your progress so keep us posted. Good luck.
 

bella-donna

SaharL
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Wow thank you for such a detailed response. I missed out on the opportunity of that space because the council still have not gotten back to me. They removed their telephone number during the pandemic and now the only way to contact them (in my borough) is via email.

I have since spoken with my accountant and you’re right regarding turnover. I’ve put this on the back burner for now but I will be saving this information for future advice.
Thank you again
 

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