complete newbie to self employed!

niecsey

Hi all, lve recently turned a hobby into a business, lm not going to get rich at all from it, it suits me and is something l love,. I informed tax man and working tax credits both want to know how much profit l expect..... very little if any this year l still have things to buy and courses to attend. I have to inform them soon with any numbers now l am totally new to all this and know the basics of keeping receipts, how much elecy l use, mileage allowances, can l say to them l don't think l will have any profit at all ? Or does that make me sound odd? I just went for it and dived into this with my eyes open it was now or never! Any advice would be gratefully received thanks x

niecsey

Anyone? Please x

phill99

I would b tempted to put a minimal profit down of say £4000. This will keep you below the threshold for paying tax and till give you maximum tax credits. They expect to be a guess so don't worry too much about the actual figure.

niecsey

Thanks phil but no way will l be anywhere near that lol it's just bit baking from home very little profit just wanted everything legit! If l was to say l wasn't expecting any profit esp this first year would That. Look ok?

niecsey

Ps seriously thanks l find. All this tax malarkey scared lol

Brassedoff

Look on line and find a free accounting package that works online. This one from the Scottish Government is about the easiest I have found.

Predict how much you think you will sell, then break that down into the cost, including Electricity/Gas, and a small cost of the kitchen (if at home divide the number of rooms by the cost etc.) Allow for the time it takes you to make the product at say minimum wage for personal costs of your own time.

That will tell you how much it will cost you against the sales price. Don't forget to deduct the cost of not selling 8% of what you make as spoilage.

That should tell you how much you may make as profit

niecsey

Thank you brassed! Really helpful. X

Wywth

Can I ask the thought process you went through when you decided to turn your hobby into a business, yet you claim you don't expect to make hardly any profit?

niecsey

Sarcasm? I'm a human l can only physically bake x amount of products a day, I went legal cos I didn't want to get into trouble. And lm a honest person! Baking involves a lot of cost for ingredients electric etc. finished product won't bring in big profits! I'm lucky enough that hubby works so l can do this around my health problems, something I enjoy at my own pace, does that answer your question?

Wywth

No sarcasm intended; it was a genuine enquiry

There's nothing illegal in having a hobby. Even HMRC allow hobby businesses where you don't have to register as self employed.

niecsey

Ok I thought you were assuming lol. Oh l didn't know that about hobbies! However ld like to try make a bit money fom my hobby now that's why


l regstered, I know l won't Make anything at first still buying tools l need etc. it's my first month. And lm already minus lol I know this will. Ease eventually! Was just looking for basic help, Would rather. Have everything above board then sly around worrying!