Think about these things before you start
As an owner or tenant, property rental or operating expenses for working space can be one of the most significant costs for your business. Luckily, we’ve got documents and guidance to help you share these costs. If you are thinking about sharing space then you need to consider these things:
- Who wants to share the space - you as owner or your tenant?
- Where is the space? At home or in the office?
- What facilities are you providing with the space? Photocopying, Internet, telephone?
- How long will the arrangement last?
- How much will you charge?
If you have a lease of the property, you need to check this for anything stopping or restricting you from sharing the property with another business. Your landlord may have included an absolute or qualified prohibition in your lease. If the ban is qualified, you will need your landlord’s consent, usually in writing, before you can share or sublet (sharing on a long-term basis).
In Scotland, the lease will usually include a qualified prohibition, with details on the specific circumstances in which the landlord will give their consent for subletting and sharing occupation. It is important to note that if a lease simply states that subletting is allowed with the landlord’s consent, the landlord is completely free to withhold consent.
Share space in your home with your own business
If you run a limited company yet work at home it is possible to rent a room to your own business.
Rocket Lawyer’s agreement for Home office space is an agreement between the homeowner and their company to provide office space within the home. It can be used by startups and home-based businesses to provide a contractual basis for:
- occupation of space within your house
- payment by the business of (or towards) the costs associated with your house.
The company is offered office space within the sole director’s or shareholder’s home at a rental in line with serviced office accommodation in the local area. The benefits of doing this are that the agreement may allow your business to deduct from its profits for corporation tax purposes the fee specified in the agreement. For corporation tax, home-based businesses are permitted to claim (as allowable expenses only) a nominal weekly sum in respect of office expenses. We strongly recommend you run your proposal by HMRC to check it works in your particular circumstances.
Share space in your office
Share your office space without having to enter into a whole lease or sublease. Rocket Lawyer’s agreement to Share office space allows another business to share workstations within the property. This must be a licence, not a lease. Make sure that the workstations are not given a formal position in the office but can be altered from time to time.