Running a home-based business keeps overheads low and so for many is a sensible way to start-up. For others, running a home business offers the freedom they've enjoyed in work from home jobs on a full-time basis.
But working at home as a new business isn't always straightforward. It can affect your mortgage, your home insurance, your tax situation and could even turn your neighbours against you. This guide makes sure you've considered all the ramifications of working from home before you make your final decision and to start a home-based business.
Read your mortgage or tenancy agreements carefully - your mortgage lender or landlord may ban you from using your home to run a business. You may require extra insurance, especially if you're inviting clients to your home or you have staff working from your house - or separate insurance cover for computer or office equipment.
Talk to your neighbours, explain your plans and make sure they have no objections - things such as car-parking can be an issue. Always run any structural changes to your home by the planning department of your local authority.
You need to talk to the Health and Safety office in your local authority to clarify any health and safety issues you need to tackle when running your business from home. The first step is to carry out a risk assessment which will help you identify any potential hazards to yourself, your staff, your clients and to other members of your household. Download a free risk assessment guide from the Health and Safety Executive at http://www.hse.gov.uk/pubns/indg163.pdf.
While you're saving money on rent you should take into account
other additional costs. For example, you may be charged business
rates on your home rather than conventional council tax. Or if you
have a specific room for work only, you may also be liable for
Capital Gains Tax if you sell your home.
Call the Valuation Office Agency (VOA) on 0845 602 1507 - they can answer your queries on business rates.
You may able to claim tax relief on your utility bills for the areas of the house you use exclusively for business. You may be able to claim back either VAT or capital allowances on purchases you make for your business (ICT equipment, office furniture etc). Read more on this in our guides on VAT and capital allowances.
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