Contractors' Questions: Which address for a home business?

Contractor's Question: Is there any way to set up a home-business using a different address; would this be legal in the eyes of HM Revenue & Customs? I want to sell products and do the odd bit of freelance consulting. I don't want clients visiting. In fact most of my work won't be done from home. For instance, can I set up using my parents' address or my friends' studio, even though I won't actually be doing anything there?

Expert's Answer: The answer to your question depends on whether you will be setting up as a sole trader or incorporating a company. If you set up as a sole trader your letterhead, email signature and website can refer to your name followed by the words 'trading as' and then the name under which you will be trading. You can use the address of your choice in these communications.

If you incorporate a company you can use any registered office address that you state in the relevant form, but you will need to ensure that this address will forward to you any communications addressed to the registered office. Many companies use the office address of their accountants as the registered office of the company. You will also need to ensure that if you incorporate a company your letterhead, emails and website, for example, must prominently display the company's registered office address, registered number and place of incorporation.

By default, HM Revenue & Customs will send information to your personal address if you are a sole trader and the company's registered address if you incorporate. If you wish to use a different address, you can agree this with HMRC.

The expert was Paul Spindler, partner in the technology group at Kingston Smith LLP.

Tuesday 12th Oct 2010