Take the right steps to make work liberating

Technology is wonderful. It has opened up a whole range of opportunities for people who want to work from home - telecommuting for their employer, as a freelance contractor, or by starting their own business.

The benefits - time management, quality of life and freedom to be based where you choose - are obvious. But setting up an office at home demands more organisation than buying a desk and getting a letterhead printed. Estate agent Knight Frank estimates that the cost of setting up an office at home is around pounds 5,000.

What issues do you need to consider? The practicalities - space, equipment, childcare, separate phone lines - are one aspect. But don't overlook the possible legal and financial implications, from insurance and bank accounts to business rates and planning permission.

First, draw up a business plan outlining what you're going to do, any unique selling points, and projected earnings and expenses for the first year or two. Banks will want to see a business plan if you want to borrow money. David Driver, a London-based chartered accountant who specialises in business development, says: "You should have a clear sense of what you're aiming for and how you're going to get there."

Mr Driver recommends a separate business account to your personal account, which makes it easier to keep track of cash flow, as well as any bank charges and interest for tax purposes. The main high street banks now have dedicated small business services offering 12 to 18 months' free banking, as well as advice on considerations such as insurance and tax.

You need to inform your mortgage lender if you are intending to use part of your home as an office. A Halifax spokesman says that a simple desk-based business is unlikely to affect the terms of your mortgage. "But we might review it if you were planning to convert the front of your house into a shop, for instance."

If you don't own your home, check the lease. Robert Orr-Ewing, head of letting at Knight Frank, says that although a residential lease "invariably stipulates it's to be used only as a private dwelling, there's rarely a problem if you are using a room, effectively as a study".

Similarly, planning permission is not usually an issue, as long as the business does not impinge on neighbours or materially alter the character or use of the house.

Difficulties can arise when employees are involved, signs go up and the business starts to become obvious. Mr Orr-Ewing cites the example of a flat rented in Knightsbridge, from which a palmistry business was run: "It ended up with queues of clients outside on the pavement, and the neighbouring businesses didn't like it. In the end the tenant had to be removed."

The criteria for business rates are similar to those for planning permission; they are unlikely to affect you if you're operating from home on a small scale.

It is important to tell your household insurer that you are using your premises for business purposes - otherwise you run the risk of invalidating your existing policy. Some will be able to provide extended cover to include your gear. First Direct Insurance, for instance, can provide a business equipment extension for up to pounds 5,000, plus cover for the occasional business visitor.

But First Direct emphasises that you may need other forms of protection against a wide range of occurrences such as mechanical breakdown, professional indemnity or loss of earnings.

And if you take on an employee you should get extra cover for employer's liability.

Certain firms, including Norwich Union, Cornhill Insurance and Homeworkers Insurance Services, offer special home office insurance, as do banks such as Royal Bank of Scotland, Lloyds and Midland.

If you are going to be self-employed, the Inland Revenue and the DSS also need to know. This can be done using form CWF1, available from the Contributions Agency or your local social security office.

Norwich Union, 0800 888222; Cornhill, 01483 568161; Homeworkers, 0800 387168; First Direct, 0800 242424.

On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
Arts and Entertainment
Lionel Messi in action for Barcelona
filmWhat makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes hobby look 'dysfunctional'
Life and Style

Olympic diver has made his modelling debut for Adidas

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week