SME Business News

The legalities surrounding home-based businesses are very confusing and local authorities need to make them clearer and more consistent, according to an article on the Timesonline website.

The UK’s home-based SME businesses want their legal position to be clarified by local councils and mortgage providers as confusion over legal regulations continues to grow.

The article, which first appeared in The Sunday Times on 30 December 2007 quotes Emma Jones, founder of Enterprise Nation, the website for home-based businesses, said:

“At present, home business owners feel they have to operate under the radar because they are not recognised by local authorities and so on. They feel they cannot tell anyone they work from home because they don’t know the rules and regulations.”

Emma Jones is quoted as estimating that only about 15% of home-based firms have informed their local councils or other bodies that they are running a business.

The Timesonline website article includes the following list suggesting who you should contact if your business is running from your home address:

YOUR LOCAL COUNCIL Your local authority will want to know if you are liable to pay business rates and whether you will need planning permission to run your business from home. To decide if this is likely, ask yourself the following questions: Will your home business mean more traffic on your street or more people calling at your house? Will your home business involve any activity considered unusual for a residential area? Will your home no longer be used mainly as a private residence? Will your home business disturb your neighbours at unsocial hours or with unreasonable noise or smell? If the answer is yes to any of them, you may need planning permission.

YOUR MORTGAGE PROVIDER You need to tell your mortgage provider. Notification is unlikely to have an impact on your mortgage but it is a good idea to let them know.

YOUR INSURANCE PROVIDER Upgrading from a domestic to a business policy will cost a bit more but, without it, stock and equipment may not be covered.

HM REVENUE & CUSTOMS You must register for Vat if your business has made more than the Vat registration threshold – currently £64,000 – in the last 12 months, or if it is expected to within the next 30 days. Details at hmrc.gov.uk .

HEALTH AND SAFETY There is no need to notify a health-and-safety inspector even if you have people visiting your home. However, you should comply with the five steps of risk assessment: identify any hazard; decide who might be harmed and how; assess the risks and remove them; record the findings; check the risks from time to time. You can download a booklet at hse.gov.uk .