... or becoming your own boss.
The number of people working from home in Britain rose by 16% in 2008 to 2.5 million. Do you have an idea, hobby or skill that you’ve long thought could be turned in to a way of making a living? Give it a go! Starting a business in your spare time and from the spare room is the best way to start. Keep the full-time day job and hurry home at nights to build a business you love. It could be legal-esque, or it may be something quite different... like fashion design or selling cheese online. Whatever your interest, here’s where to start.
An idea for the business will probably come from one of 3 areas:
1. Spotting a gap in the market - have you tried to buy something that’s just not out there? In which case, others may be looking for it too. Plug that gap with your product/service.
2. Your passion/skill/hobby – turn what you love doing into a way of making a living and it will never really feel like work.
3. Do what someone else is doing but do it better – many a great business has started this way.
Once you’ve come up with the idea, write it down and talk it through with friends and family. Once the idea is formed and you’ve made your first sale, make yourself known by communicating with journalists and establishing yourself online.
The upsides of working from home are many of course, like low operating costs, autonomy, a 30-second commute and working so productively that there’s time left over to enjoy all the other things that make life so complete. Isolation has its dangers, but the many localised home business support networks and online forums can bring interaction, new ideas and business development.
Becoming fully self-employed brings certain key considerations:
- putting money aside for tax: leaving PAYE means completing a self-assessment tax return and paying tax twice a year. Register as self-employed with HM Revenue & Customs.
- you must register for Class 2 National Insurance Contributions
- if you turn over more than £68,000 you must register for VAT. You can register voluntarily on a lower turnover, allowing you to claim back VAT yourself
- you can offset more expenses against tax than if you are employed, e.g. council tax, energy bills, rent and mortgage costs, office equipment, running costs of a car...
- setting up a personal pension. The pension is one of the greatest perks of being employed, and leaving a gap in your pension savings can be hard to recover
- private medical insurance and life insurance in order to protect yourself and your family
- mortgage lenders more often than not require accounts for 3 years or more to show a steady income stream, and the FSA is proposing an end to 'self-certification' mortgages as part of its tightening of lending regulations.
Whilst every care has been taken to ensure the accuracy of this information at the time of posting, the information is intended as guidance only. It should not be considered as professional or legal advice.