If you are about to start running a business from home, you may find that you have to get permission. Running a business from home also means you may have to buy separate insurance and check to see if you have to pay any business rates. This is how you proceed:
- How to Start a Business from Home
- Tax Allowances – Which Expenses Can be Claimed?
- Home Business Ideas
How to Start a Business from Home
Knowing how to start a business is crucial and it can mean the difference between getting your business off the ground and not starting at all. You will need to choose a name to trade under, work out which business records you need to keep and register for tax.
Once you have done all of the above you may need permission from a few people or entities such as:
- Your landlord or mortgage provider.
- Your local council if you are planning to get a lot of deliveries, have customers come to your home or advertise your business outside of your home.
If you’re running a business from home, you might also need to apply for business insurance. Your home insurance may not cover your computers and stock, for example, or customers visiting your home.
Tax Allowances – Which Expenses Can be Claimed?
If you are a sole trader, you can include some business costs in your tax return. You may be able to claim a portion of the cost of heating, broadband, council tax, telephone, rent and electricity.
When it comes to the expenses that can be claimed you will need to work out how to divide the costs reasonably. You may wish to do this by working out the number of rooms that you use for your business. Alternatively, you could divide the costs by the hours you spend working from your home.
Let’s imagine you have 6 rooms in your home and you use 1 of those rooms as an office. Your yearly electricity bill is £600, for example, and you use the same amount of electricity in each room. You can divide £600 by 6 (the number of rooms) to get your allowable expense. In this case, the allowable expense is £100.
Now let’s imagine you work from your home just 2 days a week. You will, in this case, divide the £100 by 7, and multiply it by 2 (the number of days you work from home). In this case, you will be able to claim £28.57 in electricity.
You will need to use the same method when it comes to working out how much money you can claim for your heating, broadband, council tax, telephone and rent.
Home Business Ideas
If you would like to work from home below you will find a few home business ideas that may appeal to you:
- App Designer
- Call Centre Representative
- Debt Collection
- Electronic Repairs
- Freelance Writer
- Grant Writing
- Graphic Designer
- Green Consulting
- Hair Stylist
- Herb Farming
- Home Inspection
- Home Staging
- Interior Designer
- Internet Security Consulting
- Marketing Consultant
- Massage Therapist
- Medical Transcription
- Mystery Shopper
- Personal Chef
- Personal Organizer
- Tax Preparation
- Video Producer
- Virtual Assistant
- Web Designer
Running a business from home can be a very rewarding experience but you have to make sure you keep the correct records for HMRC. With permission, the right insurance and knowledge about the expenses that can be claimed, setting up your work from home business could be a great move.