Monday, April 15, 2013

8 million people operate an online business from home

According to new research from Direct Line for Business, one in six people in the UK (or eight million) are operating as an online business from their garden office or home, specifically purchasing goods to resell, or making their own products to sell for profit.

The research reveals that of these home businesses,  5.2 million are buying items specifically to resell on at a profit, while 2.8 sell home made products such as greeting cards, soaps and eBooks. Direct Line has termed these companies ‘home webtailers', retail operations selling goods direct from home using the internet. 

Analysis of trades on a leading online auction site (not specified but fairly guessable...) showed that a large number of online sales operations run by private individuals are actually sizable businesses, with the top 5% of private sellers generating an annual turnover of a very healthy £18,094. With the new personal income tax threshold of £9,440 now in place as of this month, Direct Line believes that a significant number of people selling products online will be unaware that their activities online mean they are actually running a business from home.  Those operating a business from home on top of other employment may need to pay tax on all turnover generated through online sales.

Jazz Gakhal, Head of Direct Line for Business commented: "A large proportion of people clearly don't view themselves as running a business, despite generating a sizeable turnover selling goods online to be dispatched from their home.  People should check with HMRC if there activities online mean they qualify as running a business.  Stock stored at a home will not be covered by a standard home insurance policy, so people are putting themselves at financial risk.  Indeed for those people transporting goods to and from home, insurance is also required to avoid damage in transit. We urge people looking to make or sell items from home on a regular basis to organise home business insurance from the start."

The research also revealed that when asked about how these online home businesses prioritised key actions when they first began selling items, sorting tax arrangements and organising insurance ranked sixth and eighth (buying more stock was first, followed by setting sales targets and devising a business plan). -------------------------------------------------------------------------
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  1. Glad to see some research has been done. When I was trying to find out the number of homeworkers for the Garden Office Infographic we created, it proved difficult.

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