The research revealed 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.
Analysis of trades on a leading online auction site showed that a large number of online sales operations run by private individuals are actually sizeable businesses, with the top 5 per cent of private sellers generating an annual turnover of a very healthy £18,094.
However with the new personal income tax threshold of £9,440 now in place as of the 6th April 2014, DL4B believes that a significant number of people selling products online may be unaware that their activities mean they are actually running a business from home and those operating a business from home on top of other employment may need to pay tax on all profits generated through online sales.
Jazz Gakhal, Head of Direct Line for Business who commissioned the research 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.