How To Set Up A Business At Home - Regulatory

My first blog post on setting up a business at home proved popular - I thought I would follow it up with some tips on the regulatory side to working from home.

1. Decide whether to trade as a sole trader or to set up a limited company.
2. Incorporate a company using a formation agent (e.g. @UKplc) or an accountant. This is easy and you should not have to pay more than £150 - including disbursements.
3. As a sole trader, you will need to register as self employed with HM Revenue & Customs.
4. You will be able to offset a portion of your home costs against your profits. This is a great way of reducing tax.
5. VAT registration – this is compulsory if your sales are greater than £70,000. You can register voluntarily if wish to reclaim VAT suffered on purchases. It’s a complex area and you should seek the advice of an accountant. Make sure your accountant is set up to register and file returns online for you.
6. PAYE registration – you will need to do this if you plan to pay yourself and/or your staff a salary. Again, use an accountant and make sure that the accountant is set up to make all the necessary submissions online.
7. Home insurance – make sure that your building and contents policy covers you for working from home. Similarly, make sure that your car insurance covers business use. There should be no/minimal extra cost.
8. Liability insurance – if you need it, you might want to make sure that it covers Public Liability Insurance at your home, particularly if you plan to regularly host clients, suppliers and/or staff.
9. Business Rates – there is an element of scale to consider here – you on a laptop on the sofa is not a problem. Five staff turning up every day to work in the spare-room may be. If in doubt, check out your local council’s position.
10. Registered Office – if you set up a company, you will need to have an “official” address. If you use your home address, you will need to display the company name outside your front door. The sign can be business card size. Alternatively, use your accountant or virtual office service.
11. Make a note in your diary of the dates and deadlines that matter – particularly on the submission of official documents - because you get fined if you are late.

Follow me on Twitter @GoldenWords_UK