Can I rent out my garden room as an office space?

[TeaAndMuffins]

We've recently renovated our summer house at the bottom of the garden. It's now insulated and had electricity and air conditioning. We've tested using it as an office space and it works really well. It has it's own access so you don't need to go through the house.
We need extra income but can't have a lodger for various reasons, so we're thinking about letting the garden room as an office space.
I'm pretty sure this would all be fine and legal, but I can't find any examples of people doing this. Is this a thing? If so, where do people advertise it? And how much should you charge for it?
Thanks!

Their company doesn't require them to work in the office but they have nowhere else to go so they commute there anyway because it's more comfortable than working in their bedroom. That's the kind of person I was imagining.

I should think commuting to the office would still be preferable to using a place with no toilet or running water.

Who would be responsible for cleaning and emptying bins - especially if you have a toilet?

I don’t know if there would also be business rates to pay if this was classed as a place of work. If so, I’m assuming the renter would pay this but it’s an added an expense (for example, if a hairdresser was to use this as a studio). There is also planning restrictions on any signage and you’d need a watertight agreement and insurance. Planning may also need to look at parking availability and any potential impact on neighbours.

If it was used as a work office, who sorts the internet and the business needs? Who ensures this is secure if holding protected info? Who deals with tech issues if the internet goes down and if that’s you, do you compensate them if it’s down and affects their business?

After all that, I don’t think there would be much call for this kind of thing and if you spend money adjusting for one person, if they leave, I doubt you’d have another business lined up quickly to then use it.

Consider insurance, especially if they;re going to leave things on the premises overnight.

What would you charge to make it worth your while for the hassle with toilets, keys etc? Because presumably your friends would be paying you direct as opposed to their employers paying?

They would be v likely to have a problem with it.

I wouldn't expect them to go without a toilet or running water. We'd either install one or they'd use ours.

We would be responsible for cleaning and emptying bins.

Doesn't matter who your renting it too. Its still a business.

I presume you would need council approval for the toilet and where would ypu install it?

Even if you offered this for free i still think it may habe mortgage, insurance, council, fire regulations etc. Implications no matter how you ord it to us, it would be simpler and quicker to look into where you live through the relevant authorities

You'd have to pay income tax on your "profit". Your expenses would be limited and without separate metering you'd need to be very careful about apportioning your utility bills between personal and business use.

You would not be entitled to the tax free rent a room allowance as that only applies to residential use, not non residential (business) use. To be residential someone would need to live there as their actual home.

Although it would be classed as business use for planning purposes, you would not incur business rates (NNDR - national non domestic rates) because it would fall within the small business rates exemption allowance (for which you would need a letter from the council acknowledging your claim).

As with all forms of business, there are risks entailed in starting up, but there will probably be some demand for such a space from someone, somewhere, for the right price.

You're just like me, OP: you can see this is a really bad idea, but you still want to do it 😉

Indemnity and liability insurance is about £100 a year for £5 million cover as I've just taken it out for my business.

When I was self-employed I worked in a variety of places, but my business was registered to my home address. I didn't think you had to register your business to your literal workspace?

Thank you for all the detailed replies, everyone! Going to chew on them all before making a decision.

Yeah I used to have it for my business and it was like £70 a year

I think you and tableandchairs are talking at cross purposes but mean the same thing.

The occupant is "running" a business workplace from your garden room. So for your own planning permission and tax implications the room is a business premises.
Whether the occupant chooses to use that address as the business's registered address/office is irrelevant You are correct that place of work and (registered) place of business do not need to be the same.