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This is how you start a home business!

Sbsconsulting
Sbsconsulting
5 min read

It is very easy for starters on the labor market to work from home. After all, no investments need to be made in any business premises. A computer room, storage room or attic can be easily converted into a fully-fledged office. However, there are a few important points to keep in mind.

SBS Consulting provides incorporation services to Singapore-based companies. Additionally, we also offer secretarial, bookkeeping, accounting, taxation, GST, XBRL, and payroll services.

Check the zoning plan

The start-up of certain types of businesses may be prohibited in your municipality. For example, if your business ensures that customers regularly come home, this can cause parking nuisance in the neighborhood. This is not the intention. In addition, it is often not allowed to run catering companies or retail from home. For this reason, it is important to check your municipality's zoning plan. It states for each area what activities are and are not allowed to take place. If your company does not fully fit into the zoning plan, it is possible to apply for an exemption.

If your company does not conflict with the zoning plan, the company must be registered with the municipality.

Preserve the residential character

A house must preserve its original residential character. However, a home business can experience rapid growth; this could include an online store that is delivered to your home. If the company is doing well, the quantities will increase and more storage space will be required. The pitfall here is that the entire house will fill with stock. To prevent this, most municipalities have decided that a maximum of one third of the house may be used as business space. However, this differs per municipality, so it is important to check these facts beforehand.

As described above, your company must not cause nuisance in the neighbourhood. For example, a tailor who has to finish an order at night may not keep the local residents awake with the sound of one or more sewing machines.

Advertising on the house is also not allowed. This includes, for example, hanging bills or lighting. The only thing that is allowed is the use of a separate nameplate so that people can find the company more easily.

Manage a professional workspace

When working from home, it is very important to keep work and private life separate. If this is not done enough, there is a danger that you will always be working.
To prevent this, it is good to create a separate workplace where you can work productively. Working in the living or dining room may be enjoyable, but it doesn't come across as very professional and can be distracting. When you're on business calls, you don't want to be disturbed by television or children's noises. For this reason, the layout of an office is very important. It doesn't matter if it's the attic or the garage; if you can just take it easy. You can also make this clear to others: when you are in the study, you must not be distracted or disturbed.

Do you receive customers at home? In this case it might be smart to create an office with its own entrance. As a result, customers do not need to see your private quarters.

Tax deductions

If an external business space is rented or purchased, these costs can be put aside as operating costs. However, if you work from home, the situation is just a little trickier. Admittedly there are exceptions. An example of this can be found in a court case from earlier this year. This case concerned a self-employed building contractor who was nevertheless allowed to state his rental costs as a deductible item from the Supreme Court. However, this is not the case in everyone's situation and depends on several factors.

Firstly, at least ten percent of a rented house must be used for business purposes . In addition, the tax return may not yet have been settled by the Tax and Customs Administration. Experienced self-employed persons who have never stated the costs for the rent as operating costs should therefore not just start doing so.

Starters have a greater chance of a refund. There is a tool on the website of the Tax and Customs Administration that you can use to check whether this applies to you. In addition, it can always pay off to look at the possibilities with an accountant.

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Everything that has to do with the furnishing is for your own account. Think of the modern desk and the luxurious chairs. However, the equipment you need to practice your trade falls under operating costs. The laptop, phone, printer, literature are all tax deductible.

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