Deep Blue Publications Group LLC: Ilminster businessman offers advice to new business start ups
Small business
tax expert Robert Stone, of Ilminster, shares his tips on what Somerset's new
business start ups need to know about working from home
Micro and small businesses account for 95% of
all UK companies and employ more
than seven million people.
"The majority of new business owners
will be working from their own homes," said Chartered accountant Robert
Stone who knows only too well what it is like setting up a business from home. He started
Robert Stone & Co 20 years ago with a desk sandwiched between a freezer
cabinet and a washing machine, but now employs four people at his office in
Ilminster. "With a young family, working from home meant that I could put
plenty of hours in, but still see my two boys growing up."
As a tax expert specialising in small businesses, Robert
Stone has advised many entrepreneurs on
the practical issues of working from home, whether they are in a spare bedroom
or a garden shed. Here he shares his top tips in a simple guide to starting out
in business.
Robert
Stone's 2014 guide to working from home
1. Inform HMRC. One of the first things
you must do is inform HM Revenue & Customs that you have started a
business. This is to ensure that you are paying the right amount of National
Insurance and are prepared for Self Assessment.
2. Check with your Mortgage lender or landlord.
Whether you decide to use a spare bedroom, a corner of your dining room or your
garage, you must first ascertain whether there any restrictions on your
mortgage. If you are a tenant, you must check with your landlord.
3. Consult your local planning office.
Depending on what business activities you will be carrying out at home and
whether customers will be visiting you there, you may need planning permission
for change of use.
4. Change your insurance. Your home
insurance policy won't cover your business activities or business equipment
within the home, so speak to your insurer about upgrading your policy to ensure
you are fully protected.
5. Business rates eligibility. You may
have to pay business rates if you use a building or part of a building
specifically for non-domestic purposes. Check with your local council whether
you will be liable. However, the following reliefs are available and should be
applied for as appropriate: small business rate relief, rural rate relief,
business rates deferral scheme, enterprise zone relief. Some councils provide
an additional hardship relief.
6. Be organised. You need to keep the
right records and that includes receipts, even if you are just selling items on
eBay. HMRC can impose a penalty of up to £3,000 for not keeping proper records,
so it is worth your while investing in suitable storage, such as a filing cabinet,
storage boxes or shelving with box files, to keep all your paperwork in order
and readily accessible.
7. Keep work and home life separate. As
well as having a dedicated work space it may be worth while investing in a
separate phone line for your business. Try to structure your working day
properly, with fixed working hours and have a proper lunch break at a set time
each day. It will help you focus better. Make sure friends and family respect
your working hours and don't just drop in.
8. Claiming expenses. All businesses have
expenses that can be claimed legitimately and it's a good way of reducing your
annual tax bill. Even though working from home is a cheap way of starting a
business you will still need to claim for items such as office furniture, a
separate telephone line or broadband. Split your household expenses between
business and personal use and divide them into two categories: fixed costs and
running costs. Remember you are allowed to claim a standard mileage rate for
business use of cars or motorcycles and a flat rate business expense for your
home.
9. Don't become isolated - remember to
socialise. It's vitally important if you are working from home on your own
that you keep in touch with other people. Rather than just communicating by
email, remember to pick up the telephone and have real conversations. Also get
out and network. There are numerous networking organisations for small
businesses and you can choose whether to attend breakfast, lunch or evening
sessions. Networking will stop you stagnating as well as helping you make fresh
business contacts and even win new business.
10. Health & Safety. If you intend to
have customers and employees at your home, then you will need to carry out a
health and safety check and have public liability as well as employer's
liability insurance. If you don't want customers visiting you at home, then
find a local meeting place or café where you can meet them in comfort.
11. Keeping accurate accounts. Unless you
are already an accountant or a bookkeeper, then it is far better (and quite
likely cheaper) to outsource your accounts, VAT returns or monthly payroll to a
qualified accountant. They will ensure that you are claiming for everything you
should, as well as alerting you to any changes in legislation that may impact
on you or your business.
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