The Law and Running a Home Based Business

If you’re planning on running a craft business from home, there may be some law-related issues that you need to think about.

There are no strict laws regarding running a home based business, which is just as well, since it’s a fast growing popular choice for small business owners. Not only is it convenient to work from home, but when you’re a small business and are just starting out, it can significantly reduce overheads and expenses too.

Using Your Home as a Business Base

If you own your home, then it should be okay for you to start running a home based business if you choose to do so, as long as it won’t suddenly create lots of noise or other issues for your neighbours. A small craft business is generally not going to be too much of a problem, as long as you’re not using very noisy equipment or having constant streams of customers coming to your home.

However, if you’re renting your property, then you may well need to check with your landlord that it’s okay to run a business from the property. They will want to know exactly what you plan to run, so be prepared to provide a full explanation. Although it may be tempting to not inform your landlord, this is not recommended and could be highly problematic if you start working from home and then suddenly find you shouldn’t be.

Business Taxes

All businesses that are operating from non-domestic premises have to pay business taxes. If you’re using a whole or part of a home building for running a business, then it’s important to be aware that you may be liable for paying business rates.

Whether or not you’re liable to pay business rates on your home based business depend on how much you’re using it for business use. For example, if you have a room that is exclusively used for business purposes or have modified a room to become a craft workshop, then you’re more likely to be liable for business rates.

Your local council is in charge of issuing business rates and the Valuation Office Agency will be able to provide you with more details about how the rates are worked out.

Insurance

When you’re setting up a home based business, don’t forgot that you’ll need to arrange business insurance too. Your business equipment will generally not be covered under your house insurance. Depending on the nature of your work and whether you’re offering craft tuition and expertise as well, you may need to investigate other types of insurance too, such as professional indemnity insurance.

Professional indemnity insurance offers cover against any claims made for negligent advice. There’s also insurance policies available to cover against theft, if your workplace is burgled, and legal expenses insurance, which offers cover towards legal fees. Legal insurance often also covers you if you suddenly have to take part in jury service, which can be very difficult for self-employed home based businesspeople.

In addition, if you’re running any craft workshops or classes on your premises, then you may benefit from public liability insurance. This offers cover for any accidents or injuries occurred when a member of the public is on your premises.