Many people start their businesses from home. It saves on the cost of hiring an office (and the commute is a cinch!). There are some things to watch out for, however.
Business rates
If you’re tapping away at a computer in your spare room, you’re unlikely to have to pay business rates. The main test is whether the area you’re doing your business is also used for domestic purposes.
Licences and permissions
Even if you work from home, some types of business require local authority permission - acupuncturists and childminders, for instance. Citizens advice has lists of what activities need licences in England, Wales and Scotland.
And if you’re going to make a lot of noise or do building work to accommodate the business. Talk to your local planning department (start at the government’s Planning Portal - the government’s one-stop-shop for planning).
Allowable expenses
You can claim some of the costs of running your business from home. These costs are either fixed costs or running costs and include rent, rates, heat, light, utilities, broadband, repairs and insurance. However, it’s only the business part of the costs you can claim (you can’t just halve it between personal and business use).
See this guidance from HMRC if you’re a director of your business (ie you’re set up as a limited company). You need to use this advice if you’re self employed.
The area is a bit of a minefield - many people starting out in business may want to limit themselves to claiming £3 a week (see this guidance from HMRC).
Whatever you do, talk to an accountant. And be careful - don’t try to make out half your home is an exclusive office or there will be implications for business rates and even capital gains tax when you sell your home. There’s a guide to expenses here.
Hi There.
I need some help in knowing where to start on settin up my business, it’s more that I need to know if its legal for me to just start my own business or if I need to inform anyone before I start it up. Can I just go ahead with my idea or do I need to involve a solicitor / accountant?
For the last 2 years I have been employed on an LNG plant, one of my roles there was accommodation co-ordinator where I would find the contractors flats/houses bedsits ect. I am hoping to start my own company/business doing similar but offering these men an ‘All bills in’ contract on the properties, to cut a long story short I will find the accommodation rent it off the landlords then rent it out to the men with my company/business paying all household bills. I have alot of contacts on the 3 LNG sites in Pembrokeshire so I will have no problems finding contractors to house ( I already have 6 who are waiting for me to start up) There is a huge power station starting in January which will bring hundreds of contractors to this area.. I need to know can I go ahead and start my business or if I need to do anything legally before I set it up. I am booked onto an accountancy course so I can hopefully do my own accounts. I will be running it myself for the first 6 months untill i get too busy as included in the weekly rental price a week is the property cleaned twice & the mens clothes washed/dried & ironed which I will be doing myself at first alongside my part time job. obviously when I get busy I will give up my job but I think its sensible to keep working for as long as I can so I do not need to pay myself out of the business for a few months. Hope you can help me.
Thanks..
Jo… ; )