Tips for the smallest of businesses working from home » SMEInsider

Tips for the smallest of businesses working from home

More than eight out of 10 of UK businesses with under 10 employees now use their home as a workplace – but there are still professional considerations to be made.

According to the Big Issues for Small Businesses report by Lloyds Bank Insurance, just over half of all microbusinesses are started from home.

For more than three quarters of these homeworkers, this decision meant making significant changes to their homes to make them ‘work ready’. The most popular change, unsurprisingly, is a room-to-office conversion, carried out by 42 per cent of home workers. These conversions can cost a bundle, with the average being £1,392.

But two thirds of those choosing this path argue that it makes better financial sense – factoring in travel and food costs saved when working at home – while others say it actually increases productivity.

The main drawback for more than a third of those questioned is actually working more than they would like, while a similar figure miss the traditional sociable atmosphere of an office. Other worries include somebody in the family deleting/losing a document (17 per cent), while 10 per cent admit damaging a work device by spilling a drink on it.

David Martin, Director of SME insurance at Allianz Insurance, spoke to The Independent.

“When starting a business many people find that their home is a great place to use as it keeps their costs down,” he said. “There are a range of issues a business owner should consider including health and safety assessments and the right insurance for their needs.”

His top four tips are:

  1. To comply with the Health and Safety Act, carry out a simple risk assessment including tasks  such as testing electrical items and childproofing office space
  2. If you store business stock at home or buy equipment for your business, it is classed as a business asset and needs to be insured for damage and theft
  3. If you have business visitors, consider public liability insurance to protect you from loss or damage for claims made by visitors to your home in connection with the business.
  4. All employers who have more than five employees must have liability insurance or face fines of up to £2,500 for each day they don’t have it – employee family members are still employees.
  • These are great tips for starting a small business from your home. One thing you forgot to mention are tools that make working from home a possibility.

    For easy communication, managers and employees can download a free audio conferencing tool like Voxeet ( for simple audio calls. Make sure to use Dropbox or Google Drive for shared files. You can also use Skype or Google Hangout when you need to send a quick message or have video calls.

    There are a lot of tools out there for even the smallest of businesses. These tools not only save your business money, but are necessary in order to run them.

    What are some of your favorite tools?

  • Waterman

    I was wondering if working from home will have any affect on the Council Tax assessment, is it possible that a council could assess the tax based on the business rate?

    • LindseyKennedy

      In theory, a home-run business could previously have been subject to business rates, but the Home Business initiative (see: is supposed to have changed that. Even without the new legislation, in reality I think that running your business from home if you are the only employee and are just working out of your front room is highly unlikely to get you in trouble with the council, especially if your clients rarely/never visit you there. More complex are the arrangements for claiming back tax when you use part of your house to work in – if, for example, you have four rooms in your house and you use one exclusively as your office space, you can put down 25% of your rent/mortgage as office expenses, but if the allocated room is also your bedroom, it only counts as an office during work hours, meaning that only around 12.5% of your rent can, strictly speaking, be claimed. You may find this article useful for working out these considerations:

      • Waterman

        Many thanks, useful info.