“Most small firms are now home-based businesses,” declares IT Donut, a leading business resource website. Ash Burnham Insurance puts the number at 60%. Seen another way, one in ten of all homes in Britain house a business.Whether your venture specializes in cleaning, catering, computer programming or Internet retail, setting up shop, employees and all, out of the home that you live in, is an excellent business strategy. With these businesses putting more than £300 billion into the economy each year, the government is sitting up and taking notice, too.
The British government has put its weight behind the new boom in home-based businesses. It has been trying different ways to make it easier for first-time entrepreneurs to start businesses right out of their homes (this government website helps explain new policies towards home-based entrepreneurs).
Under new regulations announced in August 2014, the government is directly advising landlords of the importance of supporting home-based businesses, helping them see that tenants attempting to start businesses out of their rented homes do not introduce an additional element of risk. The government is minimizing the need for planning permission with such business, and in most cases, such businesses are not billed at business utility rates.
Considering how successful home-based businesses tend to be, it’s as good a time as any to think seriously about setting up your own venture in this area.
How do you buy a home where both your family and your business will thrive?
Whether your business plan is to manufacture luxury wallpaper (at least two very successful British home-based businesses do this through the outsourcing model) or create an IT startup, the government’s new business-friendly policy makes it easy to simply get going with a minimum of regulatory hassle.
The first step should be to identify the best possible location for your business, and to speak to a trusted and prominent local real estate agent about it. Such agents can tell you about any local codes that you may need to comply with, and about other businesses in the neighbourhood that may or may not present competition. You can also ask them their opinion on buying a home through your business, if your business is already up and running.
You do need to pay attention to a few things
While dual-purpose residences have become common over time, it’s nevertheless important to approach such a home purchase carefully. According to Bairstow Eves (click here to contact Bairstow Eves), a few areas tend to be particularly important.
Talk to the mortgage lender: Most mortgage lenders will have no objection to any plans that buyers may have to run a business out of their homes. If you plan to run an actual workshop in your home with workers and labourers coming in each workday, though, you may be asked to apply for a commercial mortgage.
The tax implications: Britain doesn’t have capital gains tax when you sell a residential home. Depending on how much of the home you are using for your business, though, you may need to pay such tax when you sell the house. For property taxes and income tax, you may be able to take advantage of several deductions for the part of the house that you are using for your business. You should be able to get clear directions discussing your taxes with your accountant.
Home contents insurance: Insuring your home, you will usually need to get a separate business use clause to cover any office equipment that you have, or other specialist equipment. You’ll need to speak to your insurer about such a clause, or find a specialist insurer who covers business-cum-personal use homes.
The property deed: You should ask your estate agent to make sure that the plan for the specific property that you’re interested in doesn’t have a business restriction clause. Some developers include such restrictions to make sure that they maintain the residential character of an area.
Running a business at home is a winning idea
While a few restrictions do apply to running a business at home, the fact that the government is trying to smooth the path for entrepreneurs makes it an excellent idea. As long as you don’t run a business that will generate plenty of traffic all day, it shouldn’t be difficult at all, to get started.
Michael Ward has experiencing of selling commercial and residential property. He has seen changes in the market with more people working from home and likes to share his opinion on current property trends. Michael writes for a number of different property-related websites.
