Since the financial crisis there has been a significant increase in the number of home-based businesses. This is either a result of people being made redundant or simply a case of people wanting to take their destiny into their own hands and take control. Here we look at the legal issues you need to consider when you are setting up a home-based business.
Types of Business
There are many types of business that can be run from home. It could be a service such as ironing, typing or writing, or a business selling home-made food products such as cakes, or you might be working with a manufacturer making a product which you will go on to sell. An alternative to these is buying a business franchise where someone has found a business model that already works, meaning it is less risky for you. Many of the legal requirements for these businesses are the same, although there are some differences discussed below.
Using Your Home for Your Business
Whether you own or rent your home, you should be able to run a business from it. However, it is a good idea to speak to the landlord or your mortgage provider first. If you are running a business that might have health and safety issues, especially if it involves food, then you will need an inspection by an Environmental Health Officer from the local council, and you will also need to get a food hygiene certificate. There are also various types of insurance that you might need, depending on the type of business. Service businesses should have Professional Indemnity Insurance, while businesses supplying goods should have Public Liability Insurance. You may also need policies to cover any employees, the business equipment in your home or any business vehicle. If you have employees, then you will also have to comply with employment legislation as any other employer has to. You can get legal advice in the UK if you are in any doubt.
Financial Issues for a Home-Based Business
Running any type of business has financial implications, and these begin with the type of business you set up. You can run your business as a sole trader, a limited company, a partnership or a limited liability partnership. Depending on the structure of your business, you will be liable for some of the following: Income Tax, Corporation Tax, National Insurance, Business Rates, VAT and pension provision. With regard to financial issues, it is worth employing an accountant who will be able to advise you about your financial liabilities.
Whether you already have an established home-based business or you are on the verge of setting one up and wondering where you should begin, this should have made you think about issues you need to consider or may have forgotten. Depending on the sort of business you are running, getting some legal advice in the UK might be useful if you have concerns about any laws that might affect your business.