Guidance on Home-Based Business Inspections and Use of Premises Regulations

When Revenue Scotland Can Inspect a Home Used for Business

Revenue Scotland may treat part of a home as business premises if the business is run from there or business records are kept there, but it says it cannot inspect areas used only as private living space. In practice, it will usually try to inspect records or assets somewhere else, such as business premises, an agent’s office, or a Revenue Scotland office.

• A home may count partly as business premises if the business is carried on there, wholly or partly, or if business records are kept or written up there.
• Claiming expenses for use of home as an office, or registering the home as the main place of business for VAT, is a strong sign of business use.
• Revenue Scotland says it cannot enter or inspect parts of the property used solely as a private dwelling, except where it is necessary to pass through them to reach relevant business items.
• An employee’s home will not usually be treated as business premises just because they sometimes work from home.
• Even if part of a home is business premises, Revenue Scotland should act carefully, respect privacy, and the occupier can refuse entry.
• Revenue Scotland will normally prefer an alternative inspection location and must make clear if any home inspection is voluntary.

Scroll down for the full analysis.

When Revenue Scotland can inspect a home used for business

This page explains how Revenue Scotland treats a person’s home when it is used for business purposes, and what that means for inspections. The key point is that a home can count as business premises for tax investigatory powers, but there are important limits, especially where part of the property is used only as a private dwelling.

What this rule is about

The source material deals with inspections where a business is connected to a person’s home. This matters because investigatory powers that apply to business premises may, in some cases, extend to a home. That can happen where the home is used to run the business, to keep business records, or otherwise in connection with the business.

At the same time, the guidance recognises that a home is not the same as ordinary commercial premises. Privacy concerns are central. Even where a home falls partly within the definition of business premises, Revenue Scotland says it does not have a right to enter or inspect any part used solely as a dwelling.

What the official source says

The guidance gives several examples of when a home may fall within the definition of business premises:

• the business is run entirely from the home;
• the business is carried on partly at home and partly elsewhere;
• the business operates from other premises, but business records are kept at home; or
• some records are written up at home and the records are kept there.

The guidance also says that if the business claims expenses for “use of home as office” in its accounts, Revenue Scotland will regard the home as being used at least partly as business premises. Likewise, if the home is registered for VAT as the principal place of business, Revenue Scotland says it is reasonable to assume that the home is used at least partly as business premises.

By contrast, Revenue Scotland says it will not normally treat an employee’s home as business premises merely because the employee occasionally does work there that would usually be done in an office or other business premises.

On inspections, the guidance says Revenue Scotland may enter a home that is used in connection with the carrying on of a business, but not any part used solely as a dwelling. It also says this power must be exercised with care and consideration, and that the occupier is entitled to privacy and can refuse entry.

The guidance adds that Revenue Scotland will normally prefer to inspect business assets or documents at the place where the business is carried on, and will usually try to avoid inspecting premises that are also someone’s home. It says there will often be an alternative location, such as an agent’s office or a Revenue Scotland office. If the taxpayer asks for the inspection to take place at home, Revenue Scotland will normally agree unless that would defeat the purpose of the check.

Where business premises are separate from the home, but records or assets are kept at home, the taxpayer may invite Revenue Scotland to inspect them there. If Revenue Scotland accepts, it must not enter other parts of the house, such as bedrooms, unless it is necessary to pass through them to reach the items being inspected. The guidance also says Revenue Scotland must make clear that the decision to allow this is voluntary.

Finally, the guidance says that when the inspection ends for the day, Revenue Scotland will tell the person what happens next, for example whether it will return, whether the inspection is finished and a written outcome will follow, or whether the wider enquiry will continue in other ways.

What this means in practice

The practical question is not simply “is this a home?” but “is any part of this home being used as business premises?” If the answer is yes, Revenue Scotland may treat that part of the property as within the scope of its business inspection powers, subject to the limits in the guidance.

In practice, the strongest indicators are likely to be:

• the business is genuinely operated from the property;
• business books and records are kept there;
• the accounts include a claim for use of home as office; or
• the property is registered as the principal place of business for VAT.

But that does not mean the whole home becomes open for inspection. The guidance draws a clear line between areas used for business and areas used solely as a dwelling. A spare room used as an office may be relevant. A bedroom or living area used only privately is not, unless access through it is necessary to reach the business material.

The guidance is also important because it shows Revenue Scotland’s expected approach. Even if a home may qualify partly as business premises, it will normally try to avoid carrying out the inspection there. That is a practical safeguard for taxpayers and occupiers. Alternative locations will usually be considered first.

Another practical point is that occasional home working by an employee is treated differently. The guidance says an employee’s home will not normally be regarded as business premises just because they sometimes work there. That suggests a distinction between a business using a home as part of its operations and an employee simply taking work home from time to time.

How to analyse it

If you are trying to work out whether Revenue Scotland may inspect part of a home, the following questions are a sensible starting point:

• Is the business actually carried on from the home, wholly or partly?
• Are business records or assets kept there?
• Are records written up there, even if the main business premises are elsewhere?
• Has the business claimed use of home as office in its accounts?
• Is the home registered as the principal place of business for VAT?
• Is the person an employee merely doing occasional work at home, rather than running the business from home?
• Which specific parts of the home are used for business, and which are used solely as a dwelling?
• Is there a realistic alternative location for the inspection?
• Has the occupier voluntarily invited the inspection to take place at home?

This approach matters because the guidance does not say that every home with any business connection should be inspected. Instead, it points to a two-stage analysis:

• first, decide whether the home is at least partly business premises; and
• second, decide whether an inspection at the home is appropriate, necessary, and limited to the relevant areas.

Example

A sole trader runs an online business from a room in their house and keeps all invoices, stock records, and accounting papers there. The accounts include an expense for use of home as office. On these facts, the guidance indicates that the home is being used at least partly as business premises.

That does not mean Revenue Scotland may inspect the whole house. The inspection should be directed to the room and materials connected with the business, not rooms used only for private domestic purposes. Revenue Scotland would also normally consider whether the records could instead be inspected at the trader’s accountant’s office or at a Revenue Scotland office.

Why this can be difficult in practice

The difficult part is often deciding where business use ends and private use begins. Many people use a home in mixed ways. A dining table may be used for bookkeeping, but also for family meals. A spare room may function as both office and guest room. The guidance does not give a full legal test for every mixed-use situation, so judgement may be needed.

Another difficulty is that some indicators are only indicators. For example, claiming “use of home as office” or using the home as the VAT principal place of business strongly suggests business use, but the practical scope of any inspection still depends on the facts. It does not automatically follow that every room or every item in the property is open to inspection.

There is also a difference between what the guidance says Revenue Scotland will normally do and what the underlying legal powers may allow. The guidance expresses a cautious and privacy-conscious approach, especially where a home is involved. In practice, that means the way the powers are exercised may be as important as the bare question of whether the home is partly business premises.

Key takeaways

• A home can count as business premises if it is used to run the business or to keep business records.
• Revenue Scotland says it cannot inspect parts of the property used solely as a private dwelling.
• Even where a home is partly business premises, Revenue Scotland will normally try to use an alternative inspection location where possible.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidance on Home-Based Business Inspections and Use of Premises Regulations

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