Running A Craft Business ~ Tax and Insurance
Law and legalities: In the UK
There is no such thing as hobby selling, the moment you offer anything for sale or accept money or reward (can include shopping, bartered gifts etc) you are classed as a trader.You should tell the Inland Revenue. as soon as you start working for yourself (you can’t register in advance). If you delay registering, you may have to pay an initial penalty. You’ll also have to pay further penalties if payments become due and have not been met.
You will be self employed / sole trader etc. The tax return is filled out each year. You must keep a set of simple accounts and save all your receipts, note down all income, sales etc.
Ignorance is no excuse!!
If you are selling items that you have made, you need public liability insurance. Typically for a craft type trader this will be in the region of £50 - £100.
CMTIA – is one example, but there are several options.
5 comments:
Actually at the workshop I attended just recently for the newly self employed they said that the three month rule no longer exists! It is immediately that you start to offer goods for payment, eek! But just to assure anyone reading this though when I rang up initially because I was slightly over the 3 months they were fine and really helpful. Elissa x
Thanks Elissa, Guess ignorance is no excuse?
Thanks for the update. I've checked it out and ammended the post!
Oh yeah - I am going to tweet this :)
Does ths count if i'm currently not making any profit and only selling to friends and family on a provite blog typ thing?
I'm all worried now!
I'm making no profit, i've kept records of cost of items i'm buying which by far is more than the cost i'm charging friends and family, i'm doing it as a hobbie in spare time and the cost i charge is to help me towards buying new things to play with!
:( I would have to stop if i needed all this!!
Little Miss Crafty, sadly it does count. The exchange of money or goods is classed by the IR as selling and it doesn't matter who too.
It would be worth phoning the IR and seeing what they say.
Don't let the thought of tax returns etc put you off. they really aren't to bad and there is always help and advioce at the end of the phone line!
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