Definition of a business
Discussion
I own a house and it has a barn on a separate piece of land that is 50 feet or so away from the main house, The barn is large and mostly used to park cars, the neighbours lawn tractor, put wood in to keep it dry, general junk storage.
My father in law lives with us and uses the barn to chop wood up, into bags of kindling that we use and he sells a little to a few local shops just as something to do, its not a big earning enterprise just something a retired bloke does on wet days to pass the time. He sells some to pay for fuel for the car and cover costs of bags to put the wood in.
Today I received a letter from our local council addressed to "the occupier" about "the kindling wood business operating from the barn" asking me to contact them within 14 days.
Several questions come to mind.
First, is it a business given its so small a quantity ?
Second how have the council got the idea we are operating a business in the barn in the first place, its an old farm yard with 7 houses dotted around, I am on good terms with everyone up there (so I believe but I know you never can tell with people) and many of the neighbours get given wood for free and help with odds and sods when needed.
The wood (old broken pallets) sometimes comes from my haulage business which operates entirely away from my house and does not ever go near it apart from the small work van that I sometimes take home and park in my barn. Maybe a couple a month tops.
We are very quiet, don't operate machines and do the sawing/chopping manually, its basically an old man pottering about the barn during the day in between tea and biscuit/chat breaks
I have not told my father in law about the letter yet, he would be horrified his little hobby is causing trouble.
Where do I stand on if this is actually a business or not ?
What do I tell the council ?
My father in law lives with us and uses the barn to chop wood up, into bags of kindling that we use and he sells a little to a few local shops just as something to do, its not a big earning enterprise just something a retired bloke does on wet days to pass the time. He sells some to pay for fuel for the car and cover costs of bags to put the wood in.
Today I received a letter from our local council addressed to "the occupier" about "the kindling wood business operating from the barn" asking me to contact them within 14 days.
Several questions come to mind.
First, is it a business given its so small a quantity ?
Second how have the council got the idea we are operating a business in the barn in the first place, its an old farm yard with 7 houses dotted around, I am on good terms with everyone up there (so I believe but I know you never can tell with people) and many of the neighbours get given wood for free and help with odds and sods when needed.
The wood (old broken pallets) sometimes comes from my haulage business which operates entirely away from my house and does not ever go near it apart from the small work van that I sometimes take home and park in my barn. Maybe a couple a month tops.
We are very quiet, don't operate machines and do the sawing/chopping manually, its basically an old man pottering about the barn during the day in between tea and biscuit/chat breaks
I have not told my father in law about the letter yet, he would be horrified his little hobby is causing trouble.
Where do I stand on if this is actually a business or not ?
What do I tell the council ?
Edited by Getragdogleg on Saturday 28th November 09:00 to clarify quantities and correct errors in original post.
Edited by Getragdogleg on Saturday 28th November 09:03
He seems to be selling the wood for profit so it would appear to be a business to me.
However operating a business from home does not necessarily mean a liability for non-domestic rates. You need to convince the council that the barn is not exclusively used for the business and is primarily for domestic storage.
However operating a business from home does not necessarily mean a liability for non-domestic rates. You need to convince the council that the barn is not exclusively used for the business and is primarily for domestic storage.
As he's selling the firewood it's likely to be viewed by HMRC as a business as well with possible tax implications.
https://www.gov.uk/working-for-yourself/what-count...
Possible that someone's from the council has bought/seen the kindling for sale at the shop & asked where they buy it from.
https://www.gov.uk/working-for-yourself/what-count...
Possible that someone's from the council has bought/seen the kindling for sale at the shop & asked where they buy it from.
Edited by paintman on Thursday 26th November 16:05
Hmm, he views it more as something to do rather than a business.
He will have to stop selling bags. The 400 figure was a very high estimate, real sales this year are maybe 160 or so.
I guess I was hoping someone would say it's not a business if it's not over "x" amount a year or something.
It's interesting, the wording on the letter implies the council need to "evaluate the planning implications". Rather than business rates.
This is a neighbour who has told the council we are doing this. I am becoming more sure of it.
He will have to stop selling bags. The 400 figure was a very high estimate, real sales this year are maybe 160 or so.
I guess I was hoping someone would say it's not a business if it's not over "x" amount a year or something.
It's interesting, the wording on the letter implies the council need to "evaluate the planning implications". Rather than business rates.
This is a neighbour who has told the council we are doing this. I am becoming more sure of it.
Getragdogleg said:
Hmm, he views it more as something to do rather than a business.
He will have to stop selling bags. The 400 figure was a very high estimate, real sales this year are maybe 160 or so.
This is a neighbour who has told the council we are doing this. I am becoming more sure of it.
He will have to stop selling bags. The 400 figure was a very high estimate, real sales this year are maybe 160 or so.
This is a neighbour who has told the council we are doing this. I am becoming more sure of it.
Can't he keep the rounds and just give it away/charity donations etc?
Who knows, the orders may come in thick and fast if its free/good cause and that will teach your neighbour right
See badges of trade
http://www.hmrc.gov.uk/manuals/bimmanual/bim20205....
If he's not doing it with the intention of making a profit, and he's just looking to cover expenses of his axe and saw collection then . ...
IANAL
http://www.hmrc.gov.uk/manuals/bimmanual/bim20205....
If he's not doing it with the intention of making a profit, and he's just looking to cover expenses of his axe and saw collection then . ...
IANAL
From what you say it sounds more like planning than tax.
I have known people run small things like this and then after a few years claim business use and get a property allowed for business when it wouldn't normally be. With a big barn and the haulage business I wonder if someone thinks that you are planning to do this and they are trying to pre-empt things?
Any neighbours putting their house up for sale?
I have known people run small things like this and then after a few years claim business use and get a property allowed for business when it wouldn't normally be. With a big barn and the haulage business I wonder if someone thinks that you are planning to do this and they are trying to pre-empt things?
Any neighbours putting their house up for sale?
Plot thickens, I looked through the paperwork from when we bought the whole lot and the survey/searches on the barn were separate because it was classified as a "Business premises".
I think its time for a phone call to the council, I am keen to find out what its listed as and what I can and cannot do in/with the barn.
Had a chat with FiL and there is no business, He is not going to bother any more apart from for us and the family which he will just give away to them. He never made money out of it anyway by the time he put fuel in the car to deliver the few bags out to people and bought the plastic bags to put the wood in.
I think its time for a phone call to the council, I am keen to find out what its listed as and what I can and cannot do in/with the barn.
Had a chat with FiL and there is no business, He is not going to bother any more apart from for us and the family which he will just give away to them. He never made money out of it anyway by the time he put fuel in the car to deliver the few bags out to people and bought the plastic bags to put the wood in.
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