Most freelancers and many small businesses start working from their own home (or more specifically the kitchen table …), as it is convenient, low cost and can work well if you work parttime. However, there are a number of factors that you should consider before deciding if this is for you:
Will working from home work for you?
Many people who start working from home are surprised by their own habbits associated with work, and they miss ‘going to work’ in the formal sense. Does it suit you to work on your own (and be more productive due to the lack of water cooler gossip!) or will you feel isolated and lonely, or distracted by your surroundings? Being isolated and not part of a team is often a reason for people to go back to employment.
Also, will you be able to achieve a work/life balance or will you continuely be ‘at work’ and never be able to switch off? Will you find it difficult to set boundaries? Will friends and family regularly visit you during the day because you are ‘not at work’? Do you take yourself seriously enough if you work from home? Do you feel the psychological need ‘to go to an office’ to work, get dressed up, or travel to work?
Especially if you work from home it is important that you have an external network of support or that you regularly go out to have meetings with other local professionals or clients. Become part of a local business network, or have regular buddy meetings in the local cafe with other local freelancers or soletraders. Set yourself targets to have x amount of professional meetings to go out there every week. Join a specialist membership organisation with shared meeting spaces to meet others and be part of a larger network. From personal experience I would strongly recommend the following temporary workspaces for freelancers and soletraders:
- the Hubs in Kings Cross and Angel for social entrepreneurs www.the-hub.net,
- The Hospital Club in Soho for creative businesses www.thehospitalclub.com,
- www.bhive.co in Covent Garden for female entrepreneurs set up Lynne Franks,
- The Cube in Shoreditch www.thecubelondon.com for creative freelancers,
- Third Door www.third-door.com in Wandsworth for their creche facilities (!),
- for value for money www.central-working.com in Bloomsbury)
Outside of London the following were recently (21 May 2011) recommended by The Guardian:
- Brighton: www.theskiff.org and www.thewerks.org.uk
- North East: www.colleaguesontap.blogspot.com
- Leeds: www.oldbroadcastinghouse.com
- Cardiff: www.indycube.biz
- Birmingham: www.moseleyexchange.com
- Somerset/Wiltshire: www.forwardspace.co.uk
In addition to these more personal reasons to work from home, there are various legal issues that you need to be aware of before deciding to work from home:
Planning permission and insurance
You only will need to think about this if your business activity impacts on the character of the property by undertaking major structural changes, creates noise and fumes, or if you regularly employ people or get visitors to your premises. If this is the case, then discuss your plans with the local council and they can advice you of any restrictions and how you can manage these. Also discuss this then with your insurance company on the effect of planning permission on your house insurance, as not doing this could result in your policy becoming void.
Always contact your insurance company if you start working from home as your premium might actually go down due to you being around the house more. Some insurance companies won’t allow you to take business insurance out if you are working from a private address.
Tenancy agreement or mortgage, plus business rates
Does your tenancy agreement, lease or mortgage allow you to run a business from your home? Check that you are not breaking the terms of agreement, or it could be terminated. If you are working from home and the property is classified as residential you do not have to pay business rates but you will need to pay council tax.
Claiming costs for tax purposes
Be aware that you can claim a ‘reasonable’ part of your home costs such as light, electricity and rent. You have to explain to the Inland Revenue how you have come to this percentage; you might want to measure your workspace in relation to your total space and also take into account the time actually spent in this space working. Be aware that if you claim home costs from the Inland Revenue you will become liable for capital gains tax! A good accountant will be able to advise you if claiming costs is the best option for you.
Health and Safety
What are the Health and Safety regulations that are applicable to your business and does your home comply?
