A one-off listing for charity, am I still a business seller?

porto_bello

Hi, an unusual situation here - I'd be grateful for the advice of business sellers with knowledge of HMRC regulations...

A group of several local people have got together, have commissioned a local-specific item and it is selling in several local shops, with ALL the profit going to a local charity, which is registered with the charity commission.

Beyond the charity making the profit, nobody is making any money - we're just recouping our original investment. It's a low value item - under £1, which is selling quite well at the moment, but with a limited range of appeal, we expect the sales to be temporary.

It's a one-off. We bought 250 between us, with an option to purchase more at the same price. Sales are strong for the moment, but as I say, I expect this not to last long. It's also been suggested to us that we sell a set of 5 for £5 plus postage on eBay (plus a bit to cover eBay/paypal fees).

I don't know if the eBay route is really worthwhile, but whether we sell on-line or the items just continue to sell off-line, in local shops, and even though we are essentially a group of local people raising money for charity (without the intention of raising money for ourselves), should we 'somehow' register as a business?

...I'm hoping the answer's no - it's going to be a real pain if raising around £100 for charity requires us to fill out a load of forms showing we've made a taxable profit of zero!

bris

Yes, anything you sell will still be classed as takings for tax purposes, but can be accounted for in your tax return. It can get complicated if you do your own returns but if you have an accountant they will do it for you.

porto_bello

Thanks for the reply - I was afraid that would be the case!

No, I don't have an accountant - or for that matter a business or have ever completed a tax return. Basically, I'm full-time employed and pay tax on my salary. Completely separate to that, several local people got together to produce a badge to support a local charity for a specific event. I've only now thought about wider impacts.

Frankly, I would hope HMRC would look for bigger fish than invest time and expense analysing non-existent profits. Anyway, I think I've learned my lesson - don't put yourself out to support a charity, unless you want HMRC on your case!

Strapped

There would be no tax to pay but yes you would need to report it on your tax return (earnings minus donation to charity). It's one of the reasons it's important for charity projects to get officially registered as a charity - so donations are tax deductable for the donor.