Sole traders are more than twice as likely to work from home

Self-employed workers in the UK are rejecting the traditional office space for more flexible work arrangements, according to a new report released today by the Office of National Statistics (ONS).

Results from the government’s Opinions and Lifestyle Survey (OPN) show that 32% of self-employed people had exclusively worked from home in the seven days prior to being surveyed, compared with just 14% of company employees.

Despite many employers shifting towards a hybrid office model, the data also implies that more workers would choose to work from home exclusively if they could. Only one in four sole traders opt for hybrid working, compared to 28% of employees.

For those considering making the switch from employee to business owner, there are plenty of benefits – including tax incentives and improved work-life blend. We’ll outline the steps involved and what else can be gained, below.

Why are sole traders choosing to work from home?

Business population estimates by the UK government show that the amount of sole proprietorships grew by 335,000 (12%) between 2010 and 2022.

Combined with the ONS data, this suggests that more entrepreneurial-minded Britons are waking up to the advantages of running a business from a home office setting. Advantages such as:

Reduced business overheads

Since the return to the office post-COVID, lots of UK employers have adopted a hybrid work policy. Research from Confused.com indicates that hybrid working can save companies an average of £8,100 on traditional fixed overheads such as rent, heating and support staff.

In the current, poor economy, sole proprietors who move to full-time home working will benefit from cutting these costs altogether.

Reduction in tax

Entrepreneurs who work from home can take a proportion of all home running costs and file them as expenses – reducing profits and also their overall tax bill.

Self-employed workers can also speak to HMRC to claim back on:

• Council tax
• Home insurance
• General household repairs
• Water rates
• Mortgage interest (not repayments)
• Business broadband 
• Business mobile phone plan 

Working more than 25 hours a month at home also makes the founder eligible to claim back electricity and heat expenses – a big bonus given today’s rising energy costs.

No daily commute

Commuting has become even more frustrating in the current climate. UK workers have been dealing with persistent travel chaos as a result of transport strikes. Since June 2022, there have been 17 days of bus and rail worker walkouts.

While the OPN data shows that almost half of employees don’t have the option to work from home, sole traders can skip this misery altogether by choosing the kitchen table over a bus seat – and simultaneously save on fuel and transport costs.

Full control over working hours

Many people choose to found a business with the desire to ‘be your own boss’. Having full control over every company decision means a business owner can also choose their own working schedule, rather than having to clock-in and -out of the traditional 9-5.

That said, avoiding a traditional working schedule can lead to an unstructured work day, potentially impacting overall productivity and output.

Project management templates provide a blueprint to organise the day, ensuring self-employed workers can stay on top of deadlines

How do I become a sole trader?

To become a sole trader, you just need to register as a sole proprietorship. This is the simplest type of business structure. It means you keep 100% of the profits, pay income tax rather than corporation tax, and will be fully responsible for the running of the business.

Registering as a sole trader is a painless process, as new traders need only their national insurance number to get started. Our full guide to how to register as a sole trader outlines the steps involved.

For more help on getting started, check out the below guides:

• Registering for VAT as a sole trader
• Writing a business plan
• Getting set up in a specific industry