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Look before you leap into working from home

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11th Mar 2008
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Working from home can be incredibly liberating - provided you are dedicated, disciplined and know what you are getting into. Laying out a few files on the dining room table and hooking your laptop up to your home's WiFi network might seem like a natural first step, but unless you have considered some of the underlying tax and workplace issues you could make things a lot worse for yourself.

According to some estimates, more than half the UK's working population will work for a part of the week from home by 2010. In spite of the recent decline in the number of sole practitioners, this time-honoured route to a more self-directed existence, or a better work/life balance remains a popular one within accountancy. Rather than suffer in frustration within a business hierarchy that leaves them few opportunities to progress, many entrepreneurial accountants go it alone to pursue new business opportunities, or to set up in practice by themselves.

Increasingly, too, businesses are discovering that there are cost, efficiency and HR advantages to supporting a home-based workforce.

As well as the personal flexibility and financial advantages working from home can offer, there can also be hidden pitfalls in the tax rules that are currently applied to the apportionment of business equipment and running costs, according to TaxZone's Nichola Ross Martin.

In the coming months, AccountingWEB is setting out to cater for the growing trend for teleworking within business and accountancy through a series of seminars and related articles.

Having answered numerous queries on AccountingWEB about tax treatments for home workers, Nichola has teamed up with Brian Ogilvie to tackle the issues in a series of working from home seminars that will look at home-related expenses, and tax ramifications ranging from travel costs and arrangements to VAT, capital gains tax and inheritance tax.

With the arrival of a new approach that allows for the existence of powerful multi-user broadband connections, "Inspectors will not be arguing about line rentals in the future as they might have done in the past," advises Ross Martin.

"Hopefully we are moving on to a new age where gut reaction prevails - do you think that it's a reasonable expense?" she continues. "Do watch out though, if you take any minor expense over several years, add interest and tax geared penalties, and you may not feel quite so confident on this point."

The issues surrounding home working aren't just to do with tax, adds technology editor John Stokdyk. "As someone who's experienced back pain on several occasions, selecting the right equipment and setting it up correctly is incredibly important," he says.

As part of the working from home seminar series, John will give practical advice on choosing systems to match your preferred working methods, and remind participants about some of the regulations - such as the Data Protection Act - that still apply wherever you work.

Like Nichola, John is a seasoned home-worker and points out that homeworking raises a number of quandries that will be unfamiliar to those who are more used to traditional workplaces.

"Even though you're at home, you need to create a professional environment and ensure that you and your family members respect the boundaries between work and play" he says. "And self discipline isn't as straightforward as you think - sometimes you've got to know when to stop - for the sake of your health and the sanity of those around you."

AccountingWEB.co.uk working from home seminars

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What expenses can I claim when working from home?

Replies (7)

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By louiseg
14th Mar 2008 16:46

Course in South West
I would also be interested in a course in the South West if you run one!

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By AnonymousUser
12th Mar 2008 01:03

Working from Home in the South-West
Any chance of running one of your seminars down here in the South-West.

Just in case you have forgotten where it is, it's between Bristol and Lands End. Home to the largest number of homeworkers in the country.

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By Sherlock
11th Mar 2008 17:23

Don't be an Isolationist!
I have worked at home to one degree or another for over 20 years. Strangely enough, it has not prevented me from 'being in the loop'' for office gossip, as friends seem to like phoning me and e-mailing me.

What is important is to make sure that one gets out of the home office regularly to attend meetings, meet with clients and customers and attend seminars and conferences. This produces a healthy balance and re-invigorates mind. body and creativity.

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By Hamishxero
12th Mar 2008 14:26

Some pros and some cons
I have been working in the UK about September last year. In all that time, I have only had my home as an office. Starting from 1 April, I will have an office to go to, but I still intend to spend about 2-3 days a week working from home.
At first working from the kitchen bench is rubbish, but once you set yourself up properly, with a desk, good internet, phones and the right software, then working from home is awesome. I am an Accountant, and I am sure that working from home is cheaper than working from an office. I get to spend more time with my 11 month old son and eat lunch with my wife every day. I don't have to get out of bed at 6am either for the mad commute into London.
But there does come a time when you need an office. That 11 month old sure can scream some days, so I think have a choice to work from home or the office, is probably best. I agree and think we will see a lot more people choosing to work from home more and hot desk at the office.
With my rapidly expanding business we are considering how to grow without offices everywhere. As far as I am concerned, all you need is a Blackberry, Macbook and a Vodafone wireless modem and you can work anywhere.

Cheers

Hamish
Co-founder of Xero.com

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By AnonymousUser
12th Mar 2008 18:11

Reply to Rachel Sparks
Thank you Rachel for your very quick response.

I for one would be delighted to attend a seminar in either Taunton or Exeter or Plymouth. Please put me down on your list for the West Country; hopefully there will be enough demand.

You can contact me on 01548 853 165

Hamish I cannot agree with you more. I have been working from home (in a converted car port) since 1997. It is awesome, it only takes me 30 seconds a day to get to work. I have wonderful views over the Kingsbridge & Salcombe Estuary. I do of course travel out to meet with clients regularly; I have excellent broadband facilities, file all my client tax returns electronically with either HMRC or Companies House; 2 days of CPD every month (sitting in the garden - weather permitting and my messaging service switched on).

I read recently the days of the sole practioner were numbered, because our numbers were declining rapidly. Could that be because those that are leaving our profession, are not working from home?

Incidentally, great website Hamish, concept looks very interesting!

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By AnonymousUser
13th Mar 2008 13:02

Further Pros and Cons
My wife and I used to run our practice from home until we outgrew home.
The one issue we found was that by working from home we could just carry on and work even longer hours. The problem we had was stopping at night.
The solution - we now have offices about a ten to fifteen minute drive from home with virtually no traffic issues.

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By AnonymousUser
13th Mar 2008 09:28

Seminars in the South West
In response to David and Rachel's previous comments, I'm in the process of setting up my own practice and will, initially at least, be working from home on Dartmoor. So any chance of attending a seminar in this part of the world would be very welcome!

Look forward to hearing from you Rachel if one is being organised.

Thanks

Sally Wonnacott
[email protected]

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