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0113 246 1234

What you need to know about running your business from home

Running a business from home can be helpful, especially when starting out, as there is no need to try and find business premises.

However, there are also things you need to consider if running your business from home is something you wish to do.

Permissions

Before you start the business, it is important that you check if you need permission first.

If you rent, this may be permission from your landlord, or if you are a homeowner, it may be from your mortgage provider.

In addition to this, you may also need to get permission from your local planning office if the business will require you to make extensive changes to your home. Your local council may also need to give permission if you need a license, wish to advertise outside your home, or will be receiving a lot of customers or deliveries.

Whilst you may not necessarily need permission from all or any of these people, it is important that you check at the outset so as not to cause problems further down the line.

Insurance

Your home will already be covered by insurance, but you should check whether you also need business too.

Although it may not be required depending on the type of business you are running, it is wise to consider purchasing it to cover things such as the technology you use for the business or stock you keep.

If business insurance is something which you would like to take out, then you will need to find an authorised insurer through the British Insurance Brokers’ Association (BIBA).

Business rates

Even though you are working from your own home, you may still need to pay business rates, just like any other company property would.

You may only have to pay business rates on the part of the property that you use for business (such as the garage as opposed to the whole house), but this will entirely depend on whether the Valuation Office Agency (VOA) has valued parts of your home. You can contact the VOA directly to find out if you are liable to pay business rates, and how much these will cost you.

It is important to note here that you will still have to pay your council tax as well as the business rate.

Health and safety

Despite your business being your own home, you will still be required to organise health and safety the same that any other business would.

This includes writing a health and safety policy, as well as managing risks and having the right workplace facilities.

Tax

As with all types of income, your business will be subject to taxation by HM Revenue & Customs (HMRC).

There are some reliefs that you can claim though, such as including your business costs in your Self-Assessment tax return if you are a sole trader or part of a business partnership.

Furthermore, you can, in most instances, claim relief on a proportion of your utility bills such as water, central heating, lighting, phone bills, and broadband by using them as part of your business. This is especially useful as you will be likely to be using more of these whilst working from home.

However, you can only claim for the things associated with your business activity. You cannot claim personal expenses for things that you use privately.

You should note though that you may end up needing to pay Capital Gains Tax (CGT) on the part of the home you use for the business if you sell your property. However, this is not something that is urgent at the outset of starting your business from home.

For more guidance about managing your finances and tax when operating your business from home, get in touch.   

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