Who you need to tell if you're running a business from home
Your mortgage provider or landlord. Running a business from your home may be against the terms of your mortgage or tenancy so this is the very first thing you need to check.
- Your home insurance company. Check your home contents insurance to see if it covers business equipment in a home office, if not you'll need to get separate business insurance. Get quotes and compare prices for home office insurance here.
- Your local planning office, but only if you're planning major alterations or if your home is going to be 'taken over' by the business to the extent that it's no longer a residential property.
- Your local council but only if you're going to get lots of customers or deliveries to your home, or you're going to make lots of noise or smells(!)
Tax Allowances if you're running a business from home
If you run your business from home you can claim for a proportion of your council tax, heating, lighting etc. as business expenses when you complete your tax return. Ask for our simple 'use of home as office' tax calculator
spreadsheet for guidance on what busines tax allowances you can claim for and how much you can claim.
Think carefully about dedicating one or more rooms solely to your business. If you do you may have to pay business rates rather than domestic rates on those rooms, and if you sell your house and it's gone up in value you may have to pay capital gains tax on the proportion that's dedicated to your business.
Advantages of running a small business from home
- You don't spend time or money travelling to the office
- It’s effectively rent free
- It’s convenient – you have all the tools and equipment you need close at hand
- It allows you to balance your business with family commitments
- It gives you flexibility over how you use your time
Disadvantages of running a business from home
Although there are advantages to running a small business from home, the disadvantages also need to be taken into account. Consider these carefully to ensure it really is a viable option for you:
- You need to have an area to work in, with enough space, heat and light to be comfortable
- Home working will intrude on your home life if you let it
- Paperwork needs to be contained so it doesn't take over your house
- It can be hard to ‘switch off' in the evenings and at weekends
- It's a solitary existence so you may feel isolated and lonely
- You'll need to 'train' your family so they don't disturb you when you're working, especially when you're on the phone!
Some services you may need if you're running a business from home
A free tax calculator to help work out what home office expenses you can claim when doing your tax return
Business email addresses so you don't use your personal email address
A business phone number rather than putting a mobile number on your stationery and website
A virtual office address to use on your business stationery so your home address is protected
Access to a business lounge or temporary meeting rooms so you have somewhere comfortable to meet customers