Starting a business from home sounds like the ultimate dream - flexible hours, no commute, and the freedom to be your own boss. But while it might be exciting, there’s a lot more to it than simply setting up a desk in the corner of your living room.
From navigating legal requirements to designing a workspace that keeps you focused and productive, running a home-based business involves careful planning and preparation.
Let’s run through a quick checklist of what you’ll need to figure out to get started.
Sometimes your mortgage provider, landlord or even local authority can have the final say on whether you’re allowed to operate a business from home – though the vast majority of the time, it won’t be a problem.
If you own your own home, normally all you’ll need to do is phone your bank or building society, inform them of your plans, and assure them you don’t intend to make any alternations to the property . Even if you’ve paid off your mortgage, you’ll need to check whether there are any restrictive covenants or legal restrictions contained in the title deeds – information held within the Land Registry which should have been given to you when you bought your property.
If you rent your home, you’ll need to inform your landlord, though they typically can’t refuse without good reason.
If you’re working from home and using a small part of your property to work from – like your bedroom or home office – you won’t usually have to pay business rates.
However, you may need to pay business rates if:
If you do need to pay business rates, it might be worth exploring business rates relief. You can find out more by visiting the gov.uk website.
If you work from home, you’re able to claim certain expenses related to the portion of your property that you use for business. This applies to things like your mortgage interest or rent, your council tax, and regular bills like your phone and internet.
There are two ways to calculate your expenses: actual costs, which involve calculating the precise amount of your home expenses that are related to your business activities, and simplified expenses, which offer a flat-rate deduction based on the number of hours you work from home each month. Figuring out what works best for you might involve a bit of maths, so be sure to do your research!
Read more: What expenses can I claim if I run a business from home?
Starting a business from home might sound like the ultimate inexpensive way to launch your self-employment journey, but be wary of upfront (or hidden) costs you might not have considered. For example:
Equipment and supplies. From a reliable computer to office furniture or specific tools for your trade, these initial costs can add up.
Marketing expenses. Building a website, running social media ads, or designing a logo might require professional help.
Professional services. You may need to hire an accountant or legal advisor to help you set up correctly.
Insurance. Specialised business insurance can be an extra expense you’ll need to account for. For example, if people visit your home for business purposes, you’ll need Public Liability Insurance. If you employ anyone, you’ll almost always need Employers Liability Insurance.
A virtual address. Many people who run a business from home prefer to purchase a virtual address to use on their website and professional communications, as it can often appear more professional.
What insurance do I need if I’m self-employed? Find out in less than one minute
Setting up a dedicated at-home workspace is the key to productivity and maintaining a healthy work-life balance. Here are some things to consider:
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