Running a Business From Your Home – What You Need to Know
There were 753,168 new businesses recorded in the United Kingdom between March 2021 and 2022.
And plenty of those start-ups are companies that work either partly or exclusively from home.
There are plenty of benefits – not least the fact that you can save a lot of money on not renting premises.
But, as with any business venture, there are some pitfalls too – such as the cost of energy bills running a company from your own home.
Here is what you need to know about running a business from home.
Where to start
It might sound obvious to say it, but the very first thing you need to ask yourself is “is it possible to run a business from home?”
For instance if you provide a service in person, such as a beautician, a childminder, chiropodist etc., then ponder if you have enough space, whether your business will affect your living area, and if you have the required equipment.
You will also need to think about the safety of others sharing your living space, if the business has room to grow and the potential consequences of having to take on new staff.
Alternatively, if you are a business that will deliver online services do you have enough room to keep stock in your home? And what about the broadband? If you need to transfer large files for example, then poor internet can have a major impact on how you run your company from home.
Things to consider
Before beginning a home business venture, there are a lot of considerations to factor in.
First and foremost is the work environment. You will want something that is functional, fully equipped, comfortable, and free from day-to-day distractions. Where possible have an office or personal space dedicated to work so that you can separate work and home life.
Secondly, make sure all your necessary IT equipment can cope with the demands of running a full-time business. Things like laptops, printers and broadband will need to be able to cope with full-time work. You will need to have a server that can be backed up and have a storage system or cloud that can also back up important files. And if you have to deliver a lot of post are you close to a delivery service. It’s also ideal to employ the help of a professional who has completed an online full stack dev program to create your business’s website.
You will also need to think about practical needs. For example, if your business requires you to hold a lot of stock do you have enough space/storage in your home to hold it. If you have to transport a lot of goods do you have a vehicle suitable to do so?
And, naturally, you should give consideration to your neighbours. If there will be a lot of disruption, try and keep mess and parking issues to a minimum. The last thing you want is a civil war with people you have to live next door to every day.
What About Taxing?
The part that gives some home-business workers dread is the numbers involved and the tax you have to pay, which is why it is advisable to consult with a reliable tax advisor before starting up your home company.
For example, if part of your home is used exclusively for business – such as a shop and no other purpose – then you have to pay business rates on that part of the property.
It may also be the case that you have to pay Capital Gains Tax on that part of the home were you to ever sell the property.
In terms of self-assessment tax returns, you can do simplified expenses if you work 25 hours or more from home, so paying a flat rate for some business expenses as opposed to having work out exactly how much of your home bills were spent on business.
By doing it this way, you are able to claim back on some household costs such as heating and internet bills and council tax.
