Running a business from home?

[doompixie]

I could really use some information from anyone who has experience with starting their own business and has the time to spare for me.

Specifically to do with council housing at the moment, but there are definitely other areas I could use advice in. If anyone feels compelled to help, please drop me a pm

[JOSH_IOU]

Council's will be concerned about the money coming into the home.

Or if your home is adapted for business use.

 

Most councils will not mind if it is simply yourself engaging in comercial activity within your house. However if your simply using your PC in your house then this would be fine i think.

 

It is worth checking with your council (which ever the housing department is its usually the borough.) what your rights are. Ask them what there policy is regarding using the address as a business address.

[gyzmo]

Also check with your insurance. You may need to alter your cover, and may need additional cover for professional liability etc (depending on what you are doing).

[steven4064]

And of course the part of the house you are using might be liable for business rates.

 

Steven

 

If this post is helpful, please click the scales

[meagain]

In general, you must own your own home. You can't start a business out of a privately let home because your tenancy agreement prohibits it (landlords do this as a matter of course - there are probably insurance and mortgage implications). Social landlords may be more forgiving, but you should check the paperwork to be safe. If the terms of your occupancy prohibit it, get approval in writing.

 

Someone recently clued me in on this gem about ensuring you are compliant with all relevant laws (case-in-point: fair terms in contracts):

 

Do not seek sanctuary in the law. Make the law irrelevant.

 

IOW, don't work around legal issues when you can plan to avoid them in the first place.

[Guest strangewayofsavin]

The above would be true if you are are becoming a limited liability company (ltd), or as a sole trader you was using the premises as a stock room, or having people come to the premises for a business like Aromatherapy etc. If you become a sole trader and are just using your home as a base i.e, using a p.c to do your accounts, or using a p.c to interact with a network or website, then the only people you really need to inform is the Tax/vat man. I have been running a home based business for almost 10 years.

[meagain]

The above would be true if you are are becoming a limited liability company (ltd), or as a sole trader you was using the premises as a stock room, or having people come to the premises for a business like Aromatherapy etc. If you become a sole trader and are just using your home as a base i.e, using a p.c to do your accounts, or using a p.c to interact with a network or website, then the only people you really need to inform is the Tax/vat man. I have been running a home based business for almost 10 years.

 

Every private tenancy agreement I have ever seen contained a clause to the following effect:

 

The Tenant will not carry on any profession, trade or business whatsoever at the Property, but will use it only as a private residence for the Tenant personally and the Tenant's immediate family.

 

An outstanding mortgage won't usually prevent you from running a business (though, as has been said, careful of business rates), and councils may give some leeway (get it in writing!), but if you are renting privately starting any sort of business whatsoever probably puts you in breach of your tenancy agreement.

[doompixie]

I live in a council flat, but my parents are the main tenants. I don't pay rent.

The main issue is that I make my merchandise in my room & occassionally get largeish deliveries (for a domestic residence anyway). From the research I've been doing, I don't think this will cause a problem unless the neighbours take issue with it, which they never did when I was avon rep.

My dad has assured me he'll sort it out with the council and is quite happy for me to carry on in the meantime.

 

Does anyone think there will be an issue with this? For clarification, I use a table in my room as a dedicated work surface, require occassional use of the kitchen oven (although planning to buy a tabletop oven to add to my workspace) and use my personal computer. The room as a whole is still primarily residential.

 

Thanks for the replies, thought this thread had died from the start

[Guest strangewayofsavin]

Every private tenancy agreement I have ever seen contained a clause to the following effect:.

 

I do enjoy exchanging views with you meagain, but the law states anybody that submits a tax return are required to do so by law, so the tennancy agreement is a bit like an employment contract, just because it says something in it, does not make it correct or cast in stone, So in your view, if you are a person who puts in a tax return, and lives in a rented property, will have to break the tax law, because the landlord wants to give his permission first. I would be interested in the Taxmans response to this senario.

[patdavies]

I do enjoy exchanging views with you meagain, but the law states anybody that submits a tax return are required to do so by law, so the tennancy agreement is a bit like an employment contract, just because it says something in it, does not make it correct or cast in stone, So in your view, if you are a person who puts in a tax return, and lives in a rented property, will have to break the tax law, because the landlord wants to give his permission first. I would be interested in the Taxmans response to this senario.

 

What has completing a tax return got to do with running a business from home?

 

I don't run a business, but I have to complete a tax return. It's a personal tax/finance issue. nothing to do with a business.

 

Meagain is absolutely right on this

[Guest strangewayofsavin]

Then you must have registered self employed some time in your life, as tax returns are for companies or self employed, if every employee had to do a tax return, the tax office would not be able to cope, at present the employer does PAYE tax. Or there would be no difference between PAYE and self employed in the tax mans eyes. I have been self employed for over 10 years, I have also been a director of a company. If you register self employed at any point in time, you will have to file a tax return, even if you go back to PAYE. Oh and running a business from home makes you self employed.

[patdavies]

Then you must have registered self employed some time in your life, as tax returns are for companies or self employed, if every employee had to do a tax return, the tax office would not be able to cope, at present the employer does PAYE tax. Or there would be no difference between PAYE and self employed in the tax mans eyes. I have been self employed for over 10 years, I have also been a director of a company. If you register self employed at any point in time, you will have to file a tax return, even if you go back to PAYE. Oh and running a business from home makes you self employed.

 

Let us hope that you never set yourself up as a tax expert.

 

Anybody who pays the higher rate of income tax (40%) has to complete a tax return - even on PAYE.

Anybody who has income other than earned income has to complete a atx form.

 

And BTW, if your circumstances change that you should no longer need to complete a tax form, then all you do is inform your tax office and compete for the current year - at that point you no longer need to complete a tax form.

 

I have never been self-employed; I complete a tax form because I pay 40% tax.

[meagain]

Then you must have registered self employed some time in your life, as tax returns are for companies or self employed,

 

Self-assessment tax returns are for anyone whose financial affairs are more complex than PAYE allows for. Self-employed, substantial dividend income, high-volume stock and commodities trading, ordained ministers of religion, elected officials, the list goes on.

 

(I'm ex-Revenue - what's your excuse?)

[Guest strangewayofsavin]

I will conceed on the 40% tax bracket, as I am not familiar, but the stocks shares etc, are classed as extra income, so will class as self employment, also dividend payment usually comes from investment in a company etc, so would also class as extra unearned income, I would suggest you check out the Inland revenue web site.

[patdavies]

I will conceed on the 40% tax bracket,

 

Very good of you, I'm sure

 

but the stocks shares etc, are classed as extra income, so will class as self employment,

 

edit. No it doesn't count as self-employment.

 

It is impossible to be both self-employed and earn via PAYE - or are you saying that only non-PAYE earners are allowed to hold shares, be paid rent, etc.

 

Did you not read this bit in Meagain's post?

 

(I'm ex-Revenue - what's your excuse?)

[meagain]

It is impossible to be both self-employed and earn via PAYE

 

I assume from the rest of your post you meant "possible". As you suggest, nothing to stop small-scale landlords from working, and there's a spot on the Employment supplement for declaring any tax already paid by PAYE.

[Guest peed orf]

I've have several PAYE jobs since I've been self employed.

[Guest strangewayofsavin]

Very good of you, I'm sure

 

edit. No it doesn't count as self-employment.

 

It is impossible to be both self-employed and earn via PAYE - or are you saying that only non-PAYE earners are allowed to hold shares, be paid rent, etc.

 

Did you not read this bit in Meagain's post?

 

 

Humour me, check out www.direct .gov.uk, or the inland revenue web site, type in self employed, and you will see quote "a person may be employed and self employed at the same time" and I would suggest anybody not declaring any sort of income would get advice from there tax office and not take your advice, because they will end up in POOO street, and from what I remember the thread title is "running a business from home".

[Guest peed orf]

It is impossible to be both self-employed and earn via PAYE - or are you saying that only non-PAYE earners are allowed to hold shares, be paid rent, etc.

 

It doesn't matter if your self employed or PAYE, if your receiving money, it should be declared to the Inland Revenue.

So they can have their cut!