Thorunn Howatt
Northern News Services

Yellowknife (Dec 05/01) - Imagine going to the office in a cozy pair of bedroom slippers or skipping the car start-up when the thermometer dips to -40 C.

Home-based businesses have some obvious advantages.

They are a pretty popular way of undertaking some sort of business activity in the city, said Yellowknife city planner Dave Jones. We approve them pursuant to a number of conditions.

That means no outside employees, no equipment stored in the yard and no oversized vehicles.

In a residential area you don't want to see three or four giant trucks parked in the yard because it detracts from the residential nature of the area, said Jones.

Out of about 1,500 active business licences, over 500 are home-based. Up to September this year there have been 389 licences issued to home-based operators. Thats pretty much even with last years total annual number of 538. The city has a permitting procedure for home operators.

We have an application form for a home-based business, said Jones. Its called a development permit application. During the same visit to city hall, the person fills out a business licence. The two permits cost $200.

Home-based businesses are a popular incubator for business people. It is a phenomenon that has taken hold in the last 10 years because of technology, said Jones.

Computers allow workers to research, compose and send their effort without ever leaving the comfort of home.

A businessperson might decide to operate from home because of the high cost of commercial property in Yellowknife or because of the comfort, but some make the choice for other reasons.

There are certain advantages to an individual getting a home-based business from a tax perspective, said Jones. Whatever income they generate they report and whatever expenses they incur conducting business they can deduct, said accounting firm Avery Cooper and Companys Brent Hinchey.

So an entrepreneur can often deduct part of their homes expenses at tax time. Mortgage interest, home insurance, repairs and maintenance and utility costs are some of the costs that can be deducted. Entrepreneurs cannot create a loss.

If the business doesn't generate enough revenue to make a profit before the home office expenses are claimed, the claim isn't allowed.