Starting up at home
Discussion
Hi All,
I am currently employed full time as a Product Designer.
I would like to start up a design consultancy in my spare time at home with a view to one day being fully self employed.
There are a few things that I constantly use as excuses not to do this! The first is tax, am I right in thinking that I would need to move to self assessment and that this is a one way street?
The other is my current mortgage. Buried in the small print there is a sentence about not running a business from the property. I know many people do run business from home, is it something I need to talk to the mortgage provider (HSBC) or even home insurance about?
Many thanks.
I am currently employed full time as a Product Designer.
I would like to start up a design consultancy in my spare time at home with a view to one day being fully self employed.
There are a few things that I constantly use as excuses not to do this! The first is tax, am I right in thinking that I would need to move to self assessment and that this is a one way street?
The other is my current mortgage. Buried in the small print there is a sentence about not running a business from the property. I know many people do run business from home, is it something I need to talk to the mortgage provider (HSBC) or even home insurance about?
Many thanks.
If you have ANY income derived from running a business (no matter whether the business is full or part time), then the only way you can properly account for the tax (and NI) arising from the profits of that business is to register with HMRC for self assessment.
If, at some time in the future, the self employment ceases and no other reasons exist to be in the self assessment system, then HMRC will tell you that you don't need top do self assessment.
If, at some time in the future, the self employment ceases and no other reasons exist to be in the self assessment system, then HMRC will tell you that you don't need top do self assessment.
Thanks Eric, that makes it a little easier.
I am pretty sure that the easiest way to move forward would be to register as a sole trader. Would there be any real benefit for me to set up as limited company when it comes to things like registering patents?
If I were to come up with some earth shattering product that everyone must have I wouldn't mind being bought out by google/facebook/mircosoft etc for many millions, in this regard would it be a good idea to register the IP to the company?
I am pretty sure that the easiest way to move forward would be to register as a sole trader. Would there be any real benefit for me to set up as limited company when it comes to things like registering patents?
If I were to come up with some earth shattering product that everyone must have I wouldn't mind being bought out by google/facebook/mircosoft etc for many millions, in this regard would it be a good idea to register the IP to the company?
Something else to consider is a virtual office address (quite a few folk I know use this virtual office, gives you some idea of costs anyway) as it gives anyone doing a quick search on you more confidence than if you're obviously home-based. Depends on the type of business though.
I should get round to doing it myself to be honest but I generally build a relationship with prospective clients first so by then it's not as critical. Depends how you're going to be drumming up work. If tender based then I believe a lot of people find it really helpfull to appear to have 'proper' premises, less important if it's B2C.
I should get round to doing it myself to be honest but I generally build a relationship with prospective clients first so by then it's not as critical. Depends how you're going to be drumming up work. If tender based then I believe a lot of people find it really helpfull to appear to have 'proper' premises, less important if it's B2C.
enjo said:
Thanks Eric, that makes it a little easier.
I am pretty sure that the easiest way to move forward would be to register as a sole trader. Would there be any real benefit for me to set up as limited company when it comes to things like registering patents?
If I were to come up with some earth shattering product that everyone must have I wouldn't mind being bought out by google/facebook/mircosoft etc for many millions, in this regard would it be a good idea to register the IP to the company?
Patent regulations is something I know nothing about.I am pretty sure that the easiest way to move forward would be to register as a sole trader. Would there be any real benefit for me to set up as limited company when it comes to things like registering patents?
If I were to come up with some earth shattering product that everyone must have I wouldn't mind being bought out by google/facebook/mircosoft etc for many millions, in this regard would it be a good idea to register the IP to the company?
If you are only trading at a very small, part time level, I would not go to the trouble of setting up a limited company as the additional bureaucracy etc is not worth the hassle - and the cost.
Pot Bellied Fool said:
Something else to consider is a virtual office address (quite a few folk I know use this virtual office, gives you some idea of costs anyway) as it gives anyone doing a quick search on you more confidence than if you're obviously home-based. Depends on the type of business though.
I should get round to doing it myself to be honest but I generally build a relationship with prospective clients first so by then it's not as critical. Depends how you're going to be drumming up work. If tender based then I believe a lot of people find it really helpfull to appear to have 'proper' premises, less important if it's B2C.
Thanks - I'll look into this although I'm not sure about having a Merseyside address as I may need to meet with clients - I'd much rather them know where I am in the UK.I should get round to doing it myself to be honest but I generally build a relationship with prospective clients first so by then it's not as critical. Depends how you're going to be drumming up work. If tender based then I believe a lot of people find it really helpfull to appear to have 'proper' premises, less important if it's B2C.
Eric Mc said:
Patent regulations is something I know nothing about.
If you are only trading at a very small, part time level, I would not go to the trouble of setting up a limited company as the additional bureaucracy etc is not worth the hassle - and the cost.
Thanks again. Would it be easy to switch to a limited company if things go well?If you are only trading at a very small, part time level, I would not go to the trouble of setting up a limited company as the additional bureaucracy etc is not worth the hassle - and the cost.
enjo said:
Thanks - I'll look into this although I'm not sure about having a Merseyside address as I may need to meet with clients - I'd much rather them know where I am in the UK.
It was meant more as an intro to the idea & to give some idea of costs - didn't think you were local. But there'll be similar outfits close to you. I know the owner of that one, John, and he's a real good egg if you did need one up here though!As I understand it the room from which you're running your business may be liable for business rates rather than council tax unless you can demonstrate that it's still in use as a part of the home too. Quite what the minimum requirement is to achieve this I don't know. Does anyone else? A simple case of sticking a small chest of drawers with a couple of pairs of socks in it in the corner of the room or something more elaborate?
It is very, very unlikely that any local authority would ever challenge anybody who runs a small business from a converted bedroom.
I've only ever had one client challenged in respect of using their home as a business and that was because they had converted the top floor of their free standing garage into a workshop. The council agreed that there were no business rates implications.
I've only ever had one client challenged in respect of using their home as a business and that was because they had converted the top floor of their free standing garage into a workshop. The council agreed that there were no business rates implications.
Eric Mc said:
It is very, very unlikely that any local authority would ever challenge anybody who runs a small business from a converted bedroom.
I've only ever had one client challenged in respect of using their home as a business and that was because they had converted the top floor of their free standing garage into a workshop. The council agreed that there were no business rates implications.
As this. There was a case a few years ago, ironically started by a home working trying to reduce their council tax because of their home working.I've only ever had one client challenged in respect of using their home as a business and that was because they had converted the top floor of their free standing garage into a workshop. The council agreed that there were no business rates implications.
The rule of thumb is it should be assessed if it's a specific room put to one side for the business. In practice if it's someone working from home with no staff and limited visitors they are just not interested.
http://www.voa.gov.uk/corporate/Publications/worki...
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