Top considerations when starting a business from home

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 [1]. 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 [2].

 

 

2. Check if you need to pay business rates on top of council tax

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:

 

• Your property is part business and part domestic, for example if you live above your shop.

• You sell goods or services to people who visit your property.

• You employ other people to work at your property.

• You’ve made changes to your home for your business, for example, converted a garage to a hairdresser’s. [3]  

[1] https://www.winkworth.co.uk/articles/working-from-home

 

[2] https://www.axa.co.uk/business-insurance/business-guardian-angel/what-to-consider-when-starting-a-business-from-your-home/

 

[3] https://www.gov.uk/introduction-to-business-rates/working-at-home

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. 

 

 

3. Consider how to manage your expenses

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!

 

4. Think about your startup costs

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 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

 

 

5. Creating a comfortable, dedicated workspace

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: 

 

• Choose the right spot. Pick a quiet, well-lit area in your home where you can focus without distractions. 

• Invest in comfort. A good chair and ergonomic desk setup are worth every penny. Your back, neck, and wrists will thank you after long hours. Add a cushion, wrist pad, or even a footrest for that extra touch of comfort.

• Personalise your space. Make it yours! Add plants, photos, or artwork that inspires you. A little bit of personality in your workspace can boost creativity and make you feel more at home.

• Set boundaries. Make it clear to yourself (and others!) that this is your work zone. Having a dedicated workspace helps your brain associate the area with productivity, making it easier to stay on task.