New research from Direct Line for Business (DL4B) shows that one person in six across the UK (or around eight million) is operating as an ‘online business from home’. It found that most are either purchasing goods to resell or making their own products to sell for profit, things such as as greeting cards, soaps and eBooks. DL4B has dubbed these firms ‘home webtailers’- retail operations selling goods direct from home using the internet.
The research also revealed that three in four (74%) of these businesses keep all their stock at home with an average value totalling £4,388. This is a risky proposition given a report from another insurance company, Eagle Star (part of Zurich Insurance), that which claims that the UK is the fourth worst European country for property crime. In fact, people in Scotland and Holland are more likely to become victims of burglary than anyone else in Europe. In both countries there is one burglary for every 30 people living there. The point is that many of these businesses would lose out if they were robbed because they wouldn’t be covered by standard home insurance policies. They would need specialist business insurance, because their stock is not regarded as “standard” home contents.
Last month, DL4B analysed the trades on a leading online auction site. It results showed that a large number of the online sales operations run by private individuals were actually sizable businesses. The top 5% of private sellers can generate an annual turnover of over £18,000. But it points out that this could make life complicated for the owners if they haven’t taken tax into account. The new personal tax threshold of £9,440 may now in place. But it’s important that anyone operating a business from home declares this, especially if their earnings come on top of any other employment.
As Jazz Gakhal, Head of Direct Line for Business, explains, “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.”