Working from home is often a convenient and easy option for new business owners looking to get started.
There’s no worrying about additional rent, finding the right location, or even getting to the premises on time each day. With little more than an idea and an internet connection, you can start a thriving business from the comfort of your own home.
But that doesn’t mean there’s no planning or set-up required. As with any other business, there are many things to consider when you start a business from home, including legal obligations, insurance, and taking health and safety precautions for yourself and others.
Here are a few key points to think about.
Before starting a business, you may need to get permission from your landlord and mortgage provider.
Government guidance says most people will not need planning permission to carry out a business from home, “provided that a dwelling house remains a private residence first and business second”.
Your local planning authority will be responsible for deciding whether planning permission is needed, and they might consider things like structural changes to the building, increases in traffic, noise levels, and disturbance to neighbours.
As a side note, it’s generally a good idea to let your neighbours know before you start a business from home, and to avoid causing too much disruption through deliveries or clients visiting.
Business rates and insurance
If you’re just working at a desk in your spare room, you most likely won’t need to pay business rates for your home-based business.
But you may need to pay business rates if one part of your property is for business and the other part is domestic, if you sell goods or services to people who come to your property, if you employ people who work there, or if you’ve made alterations to the property for business reasons.
You can find out whether you need to pay business rates by contacting the Valuation Office Agency.
With regards to insurance, some home or contents insurance policies do not cover items used for business purposes, so it’s important to review your existing cover and find out whether you need to upgrade it.
Plus, if you’re going to employ staff to work in your home, you’ll be legally required to take out employer’s liability insurance that covers you for damages of at least £5 million.
Health and safety
This part depends on the kind of business you’re running, and whether there are any significant risks involved in what you do, but it’s just as important for businesses based at home as it is for any other type of business.
If clients or business contacts will be coming to meet you at your house, you’ll need to carry out a risk assessment and take steps to prevent any accidents.
And if you’re running a business that handles and prepares any kind of food, you’ll need to register it with your local authority.
Registering for self-assessment
When you become self-employed, you’ll need to inform HMRC by registering to file a self-assessment tax return.
If you’re setting up a limited company, the process will be more complicated and you’ll have to register your information with Companies House, too. Talk to us if you need more information about starting a company.
Last but not least, check which costs you can and can’t claim as expenses for your business.
As a self-employed individual, you can claim a range of expenses, including office stationery, travel, stock, business insurance, advertising and marketing, or training courses, among other costs.
You can also claim a proportion of running costs such as your heating, electricity, council tax, and internet and telephone bills, as well as mortgage interest or rent, based on a reasonable calculation of the costs that apply to running your business.
This should take into account the number of rooms you use in your business, and the amount of time you spend working in them.
Talk to us
As part of our business startup service, we’ll help you figure out an effective business plan and work out your finance requirements, as well as getting your record-keeping and accounting systems in order.
Contact us for a free, no-obligation consultation to talk about your new business.