AIBU to not even know where to start with buying a business premises

[SpoilsburyToastGirl]

I'm sorry to be boring as hell but I need your help. I've been running my own business for 5 years and done well. So far, I've rented a premises which has been great, but equates to a great deal of 'wasted' money in rent. I've never missed a payment and although the premises is great, it does now need a bit of money investing in it which I'm reluctant to do as it's not 'mine.'

I've just found the perfect premises for sale close to my existing business and have had the bright idea that I could buy it and add an asset to the business, rather than pay rent to someone else.

The building is being used as a house currently, but was a commercial property at one time (pub) so I'm hoping getting a 'change of use' won't be too difficult. I just have no idea whatsoever as to what to do next, do I approach the bank to see what they'll lend me, or put an offer in to try and secure it? (it's well priced so I don't want to miss out!)

I don't have loads of money for a deposit, but have good accounts that show I am good for the mortgage payments, how much would I need to put down or are commercial mortgages different?

I feel like as an adult I should know how all this works but I'm stumped.

I don't even know if buying somewhere is as good an idea as I think it is, there could be draw backs I haven't considered but I'm just thinking about not paying rent to someone else.

OK, if I post a picture of my cat, will someone reply?

Here he is :)

The absolutely best option for you is to quickly find some business support in your area and speak with them.

And have a look here www.ukbusinessforums.co.uk/

Btw nice cat 😁

He’s gorgeous OP!

Sorry, not got a lot of practical advice. All I would say is that rent is tax deductible whereas the capital element of mortgage payments would not be so worth bearing in mind.

You need to go and have a hat with a financial adviser. You can do something with your pension that can help with purchasing a business premesis (my old boss did it but I wasn’t really listening).

But if change of use can’t be granted you’ll be left with a bit of an unusable property though.

Also. I think it's 30% deposit in commercial premises, but not 100% sure.

You will almost certainly find it a pointless exercise, partly for what Calic0 said. If you're spending £1k a month in rent right now, that's £12k off your profits each year so you'll pay about £2400 less tax per year. Buying a property and your deductions will be far less but you need to seek advice.

it was the cat wot done it for me.

Here are some links:

www.zoopla.co.uk/discover/commercial/buying-guide/#cLEhgjgORGRKslGE.97

www.planningportal.co.uk/info/200130/common_projects/9/change_of_use

It is the change of use which would worry me. Is your business suitable for the building and the area? Will it create problems with noise, smells, parking?

So it's not the good idea I thought it was? Damn!! I thought it made sense.

Would improvements to the premises be tax deductable? But mortgage payments not?

Aside from wanting an asset, buying a premises would give my business security. I'm aware at present that if my landlord wanted me out, he could ask me to leave.

Thankyou!!

You could certainly put your offer in now, and tell the agent it's subject to finding out from council how likely it is that change of use will be granted.

No improvements to property would also be capital in nature so not tax deductible. Repairs are fine, improvements not.

No, the business won't cause problems for the area. It's similar to a beauty business and is also located in a retail area. The building itself doesn't make a very convincing house, it lends itself more readily to a business premises.

I think it’s all about tax

Owning your own business property isn’t the same as owning your personal property.

Liability issues. Tax issues.

Do you have a proper financial advisor in your area of business? Tax advisor. It is 100% worth paying decent money for decent advice.

FYI your cat is lush

I aporeciate it guys

I'm aware at present that if my landlord wanted me out, he could ask me to leave.

How long is your lease for?

Seems I need a proper advisor stat. Thanks for the advice

I have 2 months left on the lease at the moment

@SpoilsburyToastGirl oooh. You should already have new one negotiated imho 😮

Speak to an advisor. You will see where you go from there

Yes that’s a very short amount of time!!!

Also all improvements are pretty much tax deductible.
Fixtures and fittings etc. But it’s the same in rented. Chattles

Will you be buying it through the business. If you go bust is it part of it? Ie, will you lose it.

If you buy it personally, rent it back to the business?
Are you LTD
VAT registered.

There are literally hundreds of answers to questions you didn’t even know needed answering.

Get proper advice. And pay DECENT money for it. Don’t ask a friend of a friend who does some accounting for a chip shop.

A couple of thousand spent now, will save you thousands in the future.

Couldn’t the OP depreciate the building yearly so there is still a tax ‘deduction’?

Oh bollocks. I told you I wasn't a real adult

Also if your thinking of buying a property that used to be retail and is now residential, financially speaking it’s the wrong way round!
Residential is generally more expensive

Could you sell the property if you didn’t get change of use? And not lose money..?

Change of use takes quite a long time to go through, especially if there are modifications needed to the building (unlikely if it’s commercial already).