Can you run a business from home

This can be a great benefit in the early days when revenue and cash flow may be challenging to predict and manage. Unsurprisingly, many people find the prospect of a 60 second commute far more attractive than an hour or so each way to and from work: a couple of hours a day equates to more than an extra day that you can spend on your business each week!

You also avoid the expense of travelling. Working from home is not for everyone. Some people find it hard to focus on their work, especially when there are domestic distractions such as household chores, needy children and pets. As a sole trader you may have to inform some bodies of your intention to run a business from home through word of mouth and official documentation.

See below for our business checklist:. A standard home insurance policy is unlikely to cover business activity so make sure you take out some additional insurance for things like loss or damage to office equipment or furniture. For example:. When you have cash flowing, you may need to pay business rates, on top of council tax, if, for example, you:. When starting your own business from home and you begin to make employment decisions, make sure that:. HMRC normally allows you claim part of the running costs of your home via your business bank account.

Use the checklist below to highlight the running costs you can claim. Login to save this checklist to your profile for future use — as you work through the list, any checkboxes that are ticked or unticked will be automatically saved to your profile. To register to join and enjoy the benefits of membership click on the link at the top right of the page. It will only take a few minutes to create your profile.

Login or Register. You can apportion the running costs of your home on a 'fair and reasonable' basis. For example, an online personal trainer who does most of their work from home will be able to claim for more than a builder who only spends a few hours each week at home working on quotes and admin. If you have a mortgage you can claim a proportion of the interest but not the capital repayments. If you rent your home you can claim a proportion of your rental costs.

You can also claim a proportion of your council tax costs. If your home business idea requires a dedicated business line and broadband service you can claim all of this.

If instead you use your personal landline, broadband and mobile phone for business use, you need to work out what proportion of the actual charges are down to business use.

With the current crisis ensuring that more of us are working from home than ever before, companies are looking at how this could be of long-term benefit to them in terms of reducing office space, improving staff wellbeing and retention and even slashing the environmental impact of commuting. Running a business from your home will spare you the trouble of finding premises for your business, and could make it easier to balance your home life with your work. However, there are a number of extra rules that you will need to consider, depending on what sort of business you are running.

You will need to consider who you will need to obtain permission from to run a business from your home. For example, if you are renting the property, you will need to check that you are allowed to run a business from the property — this may be prohibited under the terms of your tenancy agreement.

If running a business from your home is unlikely to cause any disruption or be noticeable to your neighbours or anyone outside the property, it is unlikely that you will need planning permission. For example, if your business is largely run by you alone from the computer in your office, this is unlikely to affect anyone.

However, you may need planning permission if your business will require or cause any of the following:. You should talk to your local council or planning office if you have any doubts over whether or not your business will need planning permission. If part of your home is used exclusively for business purposes, you will need to pay business rates on that part of the property — for example, if part of your home is used as a shop, and nothing else.

This is because homeowners are entitled to Private Residence Relief from Capital Gains Tax if they sell their home provided it is their only or main residence. However, bear in mind that these taxes only apply if an area of the home is used exclusively for business.

For example, if you are running a business on your computer from your bedroom, or your office can also be used as a living area, you would not need to pay these taxes on your bedroom or office. If you are a sole trader or part of a business partnership, you can use what are known as simplified expenses if you work for 25 hours or more from home.

This means you can pay a flat rate for some of your business expenses, rather than working out exactly how much of your home bills were spent on business. Doing this, you can claim back a portion of your household costs, such as council tax, heating and internet bills, based on how many hours you spent working at home each month.

It is likely that your home or contents insurance will not cover aspects of your business if you are working from home, particularly if you are storing a large amount of stock or you have customers entering the premises. If you have customers or other members of the public entering your home, you will need public liability insurance.

Furthermore there are huge advantages to running a business from your home, including saving a lot of money. I started most of my businesses in my home and sometimes I had employees working in my home.

So you want to carefully weigh the pros and cons to decide if a home business location will work for you. Many localities do not permit any businesses to be operated in residential neighborhoods without a specific variance, which many zoning boards are very reluctant to grant except under extenuating circumstances. Often, variances are only given after an extensive public hearing, including invitations for presentations of objections by all nearby residents. Just because there are already some businesses operating in your neighborhood does not mean that your neighborhood is zoned commercially or that you will easily obtain a variance.

Most towns and cities have various zoning districts allowing different types of homes and businesses. Usually in any one town many businesses have successfully obtained variances allowing an exception to zoning in their district, but there are plenty of other businesses that did not successfully receive variances. There are still other businesses that did obtain variances but only after agreeing to certain changes in their plans such as a smaller building or limits on their operations such as no business after 9 p.

So before you start your business you should determine whether your planned business can be legally operated out of your home.