New govt rules boost home-based limited companies

Tuesday 19 August 2014

People who choose to run a limited company from home will see their regulatory burdens eased as the government has announced a raft of changes to its rules.

Among the changes that will aid those creating a limited company at home are that planning permission will not normally be needed if the business will be run from home. Additionally, business rates guidance has changed, which means that most home based firms will not need to pay business rates.

Statistics from the Department of Business, Innovation and Skills (BIS) show that businesses run from home account for 59 per cent of all start ups in the UK. A large portion of these tend to be digital companies that operate off one computer, rather than those who need large manufacturing equipment or storage facilities.

These changes were announced by business minister Matthew Hancock, when he spoke at Somerset House in Central London at the first ever Home Business Summit that was organised by Enterprise Nation founder Emma Jones MBE.

He spoke about how the changes and the current economic climate mean that the present is a great time for people thinking of setting up a business.

Mr Hancock said: "There’s never been a better time to start a business, and even more people are choosing to start up from home.

"It’s this spirit of personal endeavour and self-determination that is driving our economic recovery. But home businesses don’t just fire up the economic engines and create jobs, they turn dormitory towns into living communities, they keep our streets safer, and by driving down car emissions, cleaner too."

Additionally, Ms Jones explained that one in ten domestic properties house at least one business, making the home the most popular place for people to start and grow a business. These limited companies contribute £300 billion to the UK's economy.

She added: "These are not people starting businesses out of necessity through lack of jobs, they are part of a growing movement that is responding to the new opportunities technology brings and actively taking control of their own destiny by starting out from home."

For those that are renting a domestic property that is being used as a business, a new model tenancy agreement has been constructed. This is designed to help landlords feel confident about agreeing to a business being run within their property without undermining their tenancy agreement.

The government has also made resources available so that businesses can look at methods to set up their own business. For example, the Business is GREAT website includes a range of case studies of people who have started and grown their businesses from home as well as information on the government support that is available. This campaign is part of the government's industrial strategy.

It is hoped that there will be a surge in the number of businesses starting up that are run from home after the regulations are made easier.

A survey by BIS found that up to 300,000 new jobs could be created in the UK if one in ten businesses running from home were to take on one additional employee.

By Victoria McDonnell

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