Laws on Running a Business from Home

For many people starting a home business, the ideal way to cut costs is to work from home. However there are laws and rules regarding home working and you would do well to understand them before you fall foul of your local council.

Permission

If you rent your home or have a mortgage on the property you must check that you are allowed to run a business from your home. These days many home based business people are just working on a computer or in a spare bedroom for most of the day.

There is not usually a problem with working from home as long as you are not using hazardous materials or making a noise. Although it is just a formality check with your lender or landlord that you are free to work from your home.

Neighbours

If you have a close neighbour let him know that you work at home. He may not be happy with strange noises coming from your house or lorries making deliveries at all hours. It may also mean that you have a lot of visitors to your house when running a home based business and this may seems strange particularly if your street is part of a neighbourhood watch scheme!

Insurance

Regardless of what your home based business is you must have public liability insurance. If you bake cakes you must be covered in case you poison a client. If you make jewellery your earrings may cause an irritation. For the sake of paying out around a hundred pounds each year you have the assurance that you are covered in case of any eventuality.

Tax

Even though you have a home based business you are still self employed. You must either register as a self employed worker or set up a limited company. This entails notifying the Inland Revenue that you are now self employed and making arrangements to pay your national insurance contributions. Each year you will have to send in a tax return, this is quite simple to do and these days can be done online.

If you do not have the time or inclination to keep your own accounts employ a bookkeeper or accountant to complete your accounts and submit them on time. Failure to submit your accounts on time will result in a hefty fine – even if you hire someone else to do this for you it is ultimately your responsibility to see that you meet the deadline.

Networking

Even though you work from home and could be very successful you need to make contact with other people from time to time. Join your local trade of commerce and meet other business people in your town.

Not only will this give you a break from your hectic business life but will put you in contact with other people who have home based businesses or those who are also starting home based businesses. You could also make excellent contacts that could further your business.

Laws & Advice

When running a home based business you will need advice from time to time. Business Link and other similar organisations will be able to advise you on your business problems. If you are under the age of thirty The Princes Trust can play an important part in your home business and for those over the age of fifty there are support groups such as Prime are there to guide you.