Penalties for failing to register are severe. In particular, you can be required to pay all the VAT which you should have charged, even if you have not collected it from your customers. Note that VAT is determined by your turnover, i.e., your total sales, not by your net profits. We will be pleased to advise you further on this. Obviously you have to run your business from somewhere.
Many small businesses start at home.
Some houses are subject to restrictive covenants which prevent you carrying on a trade or business. Generally using part of your house for business purposes amounts to a change of use for planning purposes. Many mortgage deeds restrict the use you can make of your house. Remember that if you work away from home you can get away from work at the end of the day. In general terms it is probably better to take leasehold premises, at least to begin with.