Private practice premises: how much?
Working from home
This is usually the most affordable option, but it’s not without expense. Here’s what you’ll have to fork out for:
- office furniture and decorations (especially if it will double as a consulting room)
- office equipment such as computers, printers and so on
- telephone and broadband connections (it’s a good idea to have a separate work phone line if possible)
- insurance – your existing insurance may not cover you for your home office, or for clients entering your home
- extra heating and lighting costs for use of your home office during the day
You may also have to pay business rates. These are similar to council tax for domestic properties. Business rates apply if you use a room in your home exclusively for work. So, if you work at a desk in the corner of your living room, or if your office is also a guest room, business rates will probably not apply.
To find out if you have to pay business rates, contact your local authority. They’ll be able to give you further advice.
You’ll also save money if you work from home. For example, you won’t have to pay for travel to an office, or parking. Plus, you can deduct some of the expenses for working from home from your earnings, reducing your tax bill. Read our article on expenses to find out more.
If you do decide to see clients at your home, take steps to make sure that you keep safe. You should assess each client for potential risk. Safety works both ways – your client may feel uncomfortable being alone with you in your home. You can read more about safety in our articles about risk.
Renting consulting rooms
If you decide to work from home but would like to see clients elsewhere, you can rent consulting rooms. This is a cost-effective and flexible alternative to renting office space.
Many clinics or other therapy businesses will have consulting rooms to rent on a sessional basis (such as a four hour slot). For example, you could rent rooms on Monday, Wednesday and Friday evenings.
That way, you’ll know exactly when you can see clients, and when you can spend time on business tasks such as admin. Rental terms are usually on a month by month basis, so you won’t be tied into a long lease or tenancy agreement, and you often won’t have to pay service charges or other hidden costs.
If you’re a member, you can browse our Therapy Room listings (this is included in free membership).
Renting office space
There are a number of costs to consider when renting office space – not just the rent itself. Depending on the type of office space, you’ll also have to pay:
- a deposit (and possibly a premium to purchase the lease)
- business rates, payable to the local authority
- utilities, such as electricity and water
- phone and broadband usage
- cleaning
- building insurance
- maintenance, usually of the interior only
What you do and don’t have to pay for will be specified in your tenancy agreement.
Renting does offer some benefits. For example, furniture may be included. And, with serviced offices, you can walk straight into a ready-made office – you could even benefit from a shared reception and meeting rooms.
You may also be able to sublet your premises when you are not using them to generate more income – find out more about subletting here.
Buying premises
If you’re thinking about buying premises, the first thing you should do is talk to your accountant or a mortgage advisor. The costs involved in buying premises include:
- the deposit
- solicitor, surveyor and estate agent fees
- VAT or Stamp Duty Land Tax (SDLT)
- alterations (you may be able to claim capital allowances on these)
- mortgage payments, which can be higher than renting depending on the terms
- office furniture and equipment
- business rates, payable to the local authority
- utilities, such as electricity and water
- phone and broadband usage
- cleaning
- building insurance
- maintenance of the both the interior and exterior
Of course, there are also benefits when buying premises. You may be able to sell them at a profit, or rent out office space and consulting rooms when they’re not being used. You may also be able to include them in your pension plans – your financial advisor will be able to discuss this with you.