Hobby Bringing in Extra Cash - taxable??

uncle_pablo

Hi,

My hobby in photography is starting to make me a bit of extra cash (selling landscape prints atg a local art gallery). Im not raking it in but making roughly £1.5K a year. Have I got to claim this as taxable - or is there a limit I can earn before paying tax? Also, If I dont declare it - how does the taxman know im making this extra money.

Thanks!!

monkeymax

uncle_pablo wrote: »

Hi,

My hobby in photography is starting to make me a bit of extra cash (selling landscape prints atg a local art gallery). Im not raking it in but making roughly £1.5K a year. Have I got to claim this as taxable - or is there a limit I can earn before paying tax? Also, If I dont declare it - how does the taxman know im making this extra money.

Thanks!!

Hi, you should declare all extra income to HMRC no matter how big or small. If your other income is too low to pay tax you may not have to pay tax on this. If you alreay pay tax on another income then you will pay tax on other income. We will not know if you do declare it... but beware we recieve information from thid partyies all the time (banks, companies that sell on beahalf of others. etc) and it will be a lot worse if we find out in 6 years and make you pay back with penalties and interest.

monkeymax

Al_Mac wrote: »

monkeymax, are you HMRC? If you are can I ask, if you sell things you bought and used, does that count as income?

Hi AL,
yes i am an officer in HMRC. If they are items you purchased for yourself then they are not liable for any tax (as most of the time you lose money on them). Only items that are bought for gain are liable to be taxed but there is some situations when this changes too.

monkeymax

Al_Mac wrote: »

Thanks mm

So selling my old books, CDs, DVDs, Videos etc, may push me towards it Just thinking about it at the mo.

selling your old items in Car boot sales or Ebay type places won't bring a liability

uncle_pablo

Thanks MonkeyMax...

Feel like im already in trouble since your HMRC........ will delcare my next payment from the Gallery....

Thanks for the advice...

monkeymax

uncle_pablo wrote: »

Thanks MonkeyMax...

Feel like im already in trouble since your HMRC........ will delcare my next payment from the Gallery....

Thanks for the advice...

ha ha, your not in trouble from me uncle pablo. I hardly think your profile name gives away enough info.

Its always better to be safe then sorry

Bean_Counter

uncle_pablo wrote: »

Thanks MonkeyMax...

Feel like im already in trouble since your HMRC........ will delcare my next payment from the Gallery....

Thanks for the advice...

Hi Uncle Pablo,

One thing to be aware of when you register with HMRC is that they will send you a form. One question on it will be when did this source of income start. If you only declare from your most recent income and omit previous income then that is a fraudulent declaration and you leave yourself open to the possible repercussions.

On a more positive note, don't forget that you claim your photography expenses against your photography income to reduce your liability. So don't forget to keep a note of your costs and corresponding receipts.

sarahlouise210

agree with Jimmo ..but..dont ever say that the photography is a hobby as you cannot claim expenses against a hobby (curious..but true) - just state you have become a self employed part time photographer, then you will as stated be able to claim all set up expenses but the ongoing expenses - if these expenses on paper cause you to make a loss you can either carry the loss forward to set against future profit..or if you have other PAYE income you can set it against the tax you have paid and receive a refund

Elaine_Wilson

I hope I don't confuse the issue with this but thought I would add my perspective.

Not all income is taxable. In particular, hobby income is not normally taxable. As a general principle for income to be taxable there has to be a transaction in the nature of a trade, usually interpreted as meaning an intention to make a profit. Hobbies are rarely profitable.

From the information in your original post you started photography purely as a hobby. At some time you realised this could produce an income and you made the transition from a hobby into a business. I think you need to consider very carefully when that occurred.

I understand that HMRC will generally not pursue situations where the annual turnover is below £800 but this does not mean a lower turnover is not taxable. It is the business intent which is important.

Also it is possible for a higher turnover not to be taxable but you need a strong case to claim that £1,500 a year is still incidental income from a hobby. How do you calculate your selling prices? Is there a profit built in or does the price basically cover costs?

So, decide when you became a business. Value your equipment at that date as capital allowances will be available on that figure. Make sure you claim all the relevant costs and come clean about starting the business.

beachbabe_3

sorry, i'm new to this and don't know where to put this comment.
I just wanted to alert people to check there tax codes as I recently
discovered I've been on the wrong code for THREE years. Just recieved
a very nice cheque for £4040.60.!!!no kidding.