Getting your homework done

By JO THORNHILL
Updated:

 

The convenience of working from home is making it an increasingly popular option. But there's a bit more involved than just turning your back bedroom into an office. You need to be organised and check out the legal implications, particularly if you're going to run your business from home.

There are many advantages of homeworking, aside from avoiding the rush hour traffic and getting an extra hour in bed, setting up a business at home means you can save money on premises. Also, you don't have to waste time finding a property and organising a mortgage.

However, it is advisable to seek professional advice from a solicitor before you take the plunge. There might be some legal aspects of homeworking which you might have overlooked.

It is vital to check the deeds of your house and mortgage or your tenancy agreement. Many state specifically that you cannot operate a business from the property. Some by-laws also prevent firms operating from home in residential areas.

If you ignore these limitations, people who object to your business can take out an injunction against you. If no-one complains for a certain amount of time, the limitations can lapse. However, it is probably best to apply to the courts for a restrictive covenant to be removed. Council tenants should contact their local authority as a breach of contract could lead to eviction.

Mortgages can have clauses which prevent business use, but lenders will often allow you to run a business from home if the nature of the house is unchanged. But again, it is important to check.

Another major benefit of working from home is the tax benefits. If you are self-employed a proportion of your costs for rooms used for work, phone and electricity bills and part of the house running costs can be treated as business expenditure and offset against tax.

But the other side of the coin is higher insurance premiums. Not only will you have to insure the tools of your business, such as computers and faxes, but you will have people visiting your home for meetings and business which is seen as a greater risk to your property. It is also advisable to insure yourself in case of liability costs should clients be injured at your house.

For a run down of some of the home working insurance policies on the market click here

Among the other points to remember are that if you're going to be storing information about other people on a computer you must register under the Data Protection Act, if you intend to employ other workers in your home you must abide by the national minimum wage and the health and safety act, and if you are self-employed you must register this with the Inland Revenue within three months of setting up your business.

HSBC has a factsheet available for people wanting to set up a business or work from home. This can be ordered by registering on the website at www.hsbc.co.uk or alternatively by calling in to a branch and speaking to a small business adviser.

Setting up a business to work from home - Setting up a business at home

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