Home Based Business |
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What is a home-based business?
A home-based business is a business which is run from a residential premises
or a building in which the owner of the business resides.
For a variety of reasons, many people are exploring the possibility of working
from their homes as an alternative to more traditional commercial and industrial
business locations. As a result, Hervey Bay City Council has implemented planning initiatives to balance the needs of the home business
and the need for a pleasant quality of life for surrounding properties.
The two main categories for home-based businesses are:
- Running a business at home
- Running a business from home
Running a business at home: most of the work is actually completed onsite at
the home of the owner. Example: Mary runs a bookkeeping business from her home. All activities occur at the
premises.
Running a business from home: a lot of work is completed offsite, but the business
doesn't own or rent premises other than the home of the owner. Example: Peter is a landscape contractor who does most of his work at clients' premises,
but does administration and applies for new contracts from home.
What are advantages and disadvantages of a home-based business?
The advantages and disadvantages most commonly described by owners of home-based
businesses are:
Advantages
- Lower start up costs and financial risks
- More control of your space and hours of work
- Less rent, travelling expenses and other overheads
- Reduced stress and no office politics
- A more flexible lifestyle
- An improved life/work balance
Disadvantages
- Workplace isolation
- Areas used for business are generally not purpose built
- Can create conflict with neighbours (e.g. parking or noise)
- Distractions during working hours (e.g. family members)
- Capital gains tax usually applies when home is sold
- Lack of exposure for some types of business
What support is available for home-based business?
Working from home is not without its challenges. In particular, isolation from
other businesses, networks and opportunities can be a major difficulty. The lack
of interaction with others can mean you are simply not aware of the support services
or networks that could help grow your business.
A range of assistance and networking opportunities are available to support business
operators and encourage small business growth. Do some homework and find out what
support is available from:
What are basic regulatory requirements?
To ensure that home-based businesses operate appropriately without creating unacceptable
impacts on neighbouring properties, new proposals are assessed against a set of
criteria in the Planning Scheme. The criteria are listed in the home-based Business
Code.
Setting up a home-based business
The first step in setting up a home-based business is to contact your local council's
planning department. A planning officer will advise you on the zoning of your
land, and tell you if a planning permit is needed to operate your business at
home.
You can contact Hervey Bay City Council on 07 4197 4444 and ask for Duty Planner.
You need to be aware that there is a difference between Home Business and Home
Activity.
Home business: means the use of a house for a business purpose that may involve employees,
customers or patients. It is a secondary use in association with the residential
use and is not a Home Activity or Family Day Care as separately defined in the
Hervey Bay City Planning Scheme 2006.
To operate a home business you need a planning permit. Fees apply when lodging
an application. You should contact Council for guidance on what fees will apply
to your application.
Home Activity: means the use of a house for the conduct of an occupation, vocation or profession
conducted by a resident of the house and not involving any employees or customers/patients
to the house.
To operate a home activity, a self-assessable development is applicable and you
need to comply with criteria listed in the home-based Business Code.
When do I need a planning permit?
As a general rule, a home business will require a planning permit.
The following provisions generally provide a guide to meeting the assessment
criteria:
- The home is your main place of residence
- Only one home-based business is conducted on site
- A home business may only employ two people who are permanent residents at the
house and no more than two persons who do not live there
- The total floor area used in the business is not more than 40 m² if the allotment
is less than 2000m², and no more than 80m² if the allotment is greater than 2000
m²
- Work other than office activities such as, bookkeeping and computer work, is
not conducted outside the hours of 8.00am to 6.00pm Monday to Friday and 8.00am
to 5.00pm Saturday.
- Work is not conducted at all on Sundays or on public holidays
- Nothing is offered for sale, except goods made or repaired on the site
- No goods are displayed so they are visible from outside the site
- A maximum of two customers/clients visit the site per day
- Only one commercial vehicle, (not including a heavy vehicle or semi trailer)
is present at any time on the site
- Loading and unloading of goods is not undertaken by a vehicle larger than a Small
Rigid Vehicle
- No vehicle is fuelled, serviced or repaired on the site
- The business does not produce any dust emissions and noise which exceeds the
background noise level plus 5dB
- Trade person’s storage and horticultural activities are located at the rear of
the dwelling and any vehicle, or stored equipment or materials, is screened from
view from all public places and adjoining residential premises via dense landscaping
or screening
- Any signage associated with the Home business is small scale and not visually
obtrusive
If you require further advice or assistance please contact Planning Department
on 07 4197 4444.
Some business activities aren't suitable for a home-based business and will not
be granted a permit under any circumstances.
A planning permit provides evidence that the council has given you permission
to use or develop your land in a particular way. So before making changes to the
use or development of your property, it is essential that you contact the local
council's planning department.
You will also be advised on local and state government guidelines that must be
considered for particular developments.
When I may not need a planning permit?
Depending on the Planning Scheme Zone a home activity may be within the correct
use for the site.
As a general rule, a home activity may not require a planning permit, depending
on your zone as long as you can meet a number of specific conditions.
As a general rule, a home activity must meet these requirements:
- The home is your main place of residence
- Only one home activity is conducted on site
- Home activity is conducted only by a permanent resident of the house
- Work does not involve any employees or customers/patients to the house
- Maximum 30m² gross floor area is used for the activity
- The activity does not require the provision of any additional services
- There is no public display or sale of goods from the premises
- Work, other than office activities such as bookkeeping and computer work, is
not conducted outside the hours of 8.00am to 6.00pm Monday to Friday and 8.00am
to 5.00pm Saturday.
- Work is not conducted at all on Sundays or on public holidays
- Only one commercial vehicle, (not including heavy vehicle or semi trailers)
is present at any time on the site
- Loading and unloading of goods is not undertaken by a vehicle larger than Small
Rigid Vehicle
- No vehicle is fuelled, serviced or repaired on the site
- The business does not produce any dust emissions and noise which exceeds the
background noise level plus 5dB
- Trade person’s storage and horticultural activities are located at the rear of
dwelling and any vehicle, or stored equipment or materials, is screened from view
from all public places and adjoining residential premises via dense landscaping
or screening
- There is no signage
When do I need a building permit?
Before making changes to the use or development of your property, you need to
contact your local council's planning department.
If your business set up requires building work to be carried out, you may need
a building permit. A building permit is issued by a registered building surveyor.
It gives approval for building work to proceed, and ensures that building regulations
are followed. A building permit will also ensure that your builder is registered
and insured, and that key stages of the work are independently inspected.
The most common reasons for needing a building permit are to:
- Construct a new building
- Demolish all or part of a building
- Alter or extend an existing building
- Remove all or part of a building
- Change the use of an existing building
If you are not sure if your building work requires a building permit, contact
your council's building department, or alternatively, a registered private building
surveyor.
Some home-based businesses have further specific requirements. These include:
Food: businesses involved in the preparation, serving, manufacturing, transporting
or selling of food.
Preparing food for the general public is very different from cooking for the
family. You must comply with a number of national and state legal obligations.
The first and most important of these is to be registered with your local council.
Contact your council and arrange to meet with the Environmental Health Officer
(EHO). As part of the registration process, the EHO will identify exactly what
you need to do to comply with the regulations.
Hervey Bay City Council Environmental Health Officer can be contacted on 07 4197 4244.
Personal care and body art: businesses like hairdressing, beauty therapy, tattooing/piercing, personal training,
massage and acupuncture.
Many personal care and body art businesses can be run from home, and in some
cases they can also operate as mobile businesses. However, there are also certain
businesses in this category that can only operate from home if they comply with
very strict regulatory requirements.
Home-based businesses can include services like hairdressing, hairstyling, manicures/pedicures,
make-up and massage. These services can be offered in your home, your clients'
homes and other locations, such as hotels, hostels, day care centres and nursing
homes.
Hairdressers and beauty therapists are required to be registered with the council
relevant to where they live. Physical therapists, such as those offering massage
treatment and personal trainers are not required to be registered with their council.
Contact the council's Environmental Health Officer to see if your business needs
to be registered.
Hervey Bay City Council Environmental Health Officer can be contacted on 07 4197 4244.
Businesses that involve high potential health risks, such as skin penetration,
contact with bodily fluids and colonic irrigation, can only operate from home
if strict requirements are met regarding the business set up and management.
If you can comply with these requirements (which are the same as for commercial
premises), your application for registration with the local council will be considered.
For answers to specific questions, contact your council's environmental health
department.
Licences, registrations and permits
The licences, registrations and permits you will need depend mainly on the type
of business you will be operating.
For example, the requirements needed to operate a personal care business, like
a hairdressing salon, will be different from those needed for an accommodation
business, like a Bed & Breakfast.
SmartLicence will provide you with tailored business licensing information including:
- Summary information on the State, Local and Federal Government requirements for
your particular business
- The name, address and telephone number of the agency responsible for each listing
- Licence application forms
- Details of licence fees, periods of cover, and renewals
- On-line lodgement and secure payment for some licences
What expenses can I claim as a tax deduction?
As a general rule, a home-based business can expect to claim tax deductions for:
- Expenses relating to the home area/s used for the business
- Motor vehicle expenses
- Checklist for new business: can be completed online
- Tax basics for small business: can be downloaded and printed
- e-Record: record keeping tool for cash-based small businesses
- Home office expenses calculator: calculates your tax deductions
Expenses relating to the home area used for the business
If your home is the principal place of business, you may be able to claim:
- The cost of owning or renting the home, including rent, mortgage interest, housing
insurance premiums and local government rates
- The cost of using a room, particularly the ongoing cost of utilities, such as
gas and electricity for heating, cooling and lighting
- The cost of phones used for the business, including land lines, mobiles and internet
connection
- Depreciation in the value of equipment and hardware, particularly items like
computers, printers, power-tools and office furniture
- Depreciation in the value of fittings for the home, such as curtains, carpets
and light fittings
It is important to note that if you're eligible to deduct interest on your home
loan, you are liable to pay Capital Gains Tax on your home when you sell it.
The cost of trips between your home and your workplace are usually regarded as
a private expense and so cannot be claimed. However, the cost of travel for any
reason associated with your business is generally deductible. So if you are running
a home-based business, you may be able to claim the cost of trips between your
home and other places, provided those trips are a direct result of you conducting
your business.
For example, expenses could be claimed if you are:
- Travelling to a client to work there
- Delivering documents to a client
- Driving to your tax adviser for a consultation
- Picking up materials from your supplier
- Carrying bulky tools or equipment which cannot be left at clients' premises
Setting up a home-based business work area
Regardless of what sort of business you are setting up, you will almost certainly
need a designated office area, and appropriate equipment to manage your everyday
business operations.
You should also be mindful that your clients and business associates, and even
the general public, may visit your premises. Consideration should be given to
the furnishings and equipment that will give them the right messages. It is also
possible that separate areas will be needed for staff to take breaks and eat meals.
Commonly needed items for home-based office areas include:
- Computers and appropriate software
- Printers, fax machines, photocopiers
- Phones and internet facilities
- Desks and work chairs
- Filing cabinets and bookshelves
- Furniture appropriate for meetings
- Furniture for reception area
- Tea and coffee facilities
- Basic stationery including letter-head paper and business cards
Occupational health and safety (OHS) issues for home-based businesses include:
- The impact of your business activities on the environment
- The design of your office area, and provision of furniture and equipment
- The separation of business areas from the rest of your home
- Environmental comfort, particularly lighting, heating and cooling
- Selecting, motivating and managing your employees
- Straining of staff in safe working procedures
- Preventing workplace isolation and giving employees control of their work
- An evacuation plan
Policies and procedures should be developed to cover the OHS issues relevant
to your business and its operations. Areas of particular importance for employees
include job design, hours of work, breaks and task variation.
If you are setting up a home-based business, the benefits of using eBusiness
practices should be an important consideration.
Put very simply, eBusiness (electronic business) means using the internet to
conduct your normal business operations. For both corporate and small business,
huge increases in efficiency, and huge savings in time and money have been created
by the rapid growth of eBusiness.
Give yourself a quick check. If you are using any of the following practices,
you are already enjoying the benefits of eBusiness. Practices you might not be
familiar with may give you ideas for future business improvement.
- Using email to communicate with and invoice clients
- Ordering supplies or services online
- Using the internet for information, research and keeping up with your competition
- Banking and paying your bills online
- Promoting your business, products or services from your website.
The information in this page is intended to be of general assistance. See your
accountant, solicitor or business adviser for advice relating to your particular
circumstances.
For further enquiries, contact:
Hervey Bay State Development Centre on 07 4125 9270
Call the Queensland Governments Business Hotline on 1300 363 711
Hervey Bay City Council, 07 4197 4444 Hervey Bay City Council website.
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