I’ve been thinking about the matter of home working recently after reading a Federation of Small Businesses (FSB) Report on the value of home-based businesses in Scotland. I know from my own experience that working practices in the legal sector are changing and it is likely that more of our staff at Young & Partners will do some home working in future given our firm’s move to “the Cloud”.

Much of the growth in jobs since the recession has been in self-employment, and the Report states (rather surprisingly) that 71% of businesses in Scotland are sole traders with no employees. Another notable statistic in the Report is that SMEs with less than 50 workers account around for around 50% of the employment in the private sector. When private sector employment is mentioned, we usually think of the likes of RBS, Tesco, McDonalds, M&S etc but the reality is that half of those in the private sector work for companies which most of us will probably never have heard of.

Home workers are even more invisible as a result of often working on their own and not having business signs outside their home. However, they play a significant role in our economy and the Report estimates that in Scotland in 2014:

• 291,000 jobs were created through home-based businesses;
• 1% of all private sector employment was created by home-based businesses; and
• Home based businesses contributed £19.7 billion turnover to our economy (equating to 9.6% of total private sector turnover)

Advances in technology and cheap broadband together with the costs of premises and childcare responsibilities are important factors which are driving this new type of working. The Report notes that some of the most popular sectors for home-based working are tourism, catering, business services, construction and creative services.

Home businesses, however, will have many of the challenges of a traditional business (i.e. debt collection, contracts going wrong, disputes with suppliers/customers, employment/contractor issues etc) and therefore also need to consider obtaining legal advice when required. If the home worker is a sole trader they will have personal unlimited liability for the debts of their business so they might want to consider incorporating as a limited company, insurance and also updating contracts to include limits of liability.

At Young & Partners we specialise in advising SMEs and understand modern working practices. If you would like to discuss any issues on home working or your businesses then please contract Angus McGuire or Alan Stalker on 01383 721 621.