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1. Company Directors can protect their home address details.
2. You are no longer required to have a Company Secretary.
 
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Disadvantages of Working from Home

 

Whilst working from home can be extremely beneficial for a new company, there might also be potential disadvantages or restrictions on embarking on this course of action.

If, like many people, you have set-up a company after having spent sometime working for someone else, your home might have provided a comfort after a hard day.

By merging the two, even if the work is more satisfying might take away the solace and comfort which the home once provided.

Affects on the Home Environment

Working from a personal residence can alter the home environment. The change might be positive in that the director is able to devote more time to their family or gain more leisure time through not having to commute.

On the other hand, bringing work home has traditionally rarely provided a positive long–term outcome. Having the office in a room next door can result in people being absent even when they are there.

The answer which may be easy said than done is to achieve a balance so that a creative and professional office environment can exist in a home which is not dominated by work.

Mortgage Rent and Insurance Covenants

Some mortgage or rental agreements for residential property prohibit the use the use of that premise for commercial activity.

The provisions are usually to limit the exposure of the landlord or mortgage company to additional risks that might come from running a business.

An extensive of these types of restrictions and a potential hidden cost might be the effect that trading from home has on household insurance.

The worst case scenario in all three example above might be invalid or breach any agreement are lead to a cancellation notice being served.

Perhaps less drastic might be an increase in the amount the resident is required to pay in order to nullify the concerns to the other party to the agreement.

Capital Gains Tax Affects

The main residence of a person is currently exempt from capital gains tax provided that it is used solely as a private dwelling.

In working for home the person is effectively splitting up the property in to private and business use.

The advantage of this is that in the short term, the company can absorb a portion of the household bills which it is deemed to use in the course of its operations at the home.

The disadvantage is that when the property is disposed of, any capital gain which would normally not be chargeable would have to be apportioned between that which is private and that which belongs to the commercial activities.

The latter part would be chargeable to capital gain tax.

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