Selling homemade jewellery

CP26

I've been dabbling with some DIY jewellery making for fun. I've made a few things for gifts but I have a limited number of friends and family to give stuff away to - and I'm not sure what to do with the rest.

A friend also makes her own jewellery and was considering making enough to sell (she doesnt work). She mentioned perhaps sharing a stall at a craft fair.

Apart from tax implications would there be anything else I'd have to consider? For example, I read somewhere that I might need public liability insurance? If I sold it and donated all of the money to charity would this make any difference?

Flyonthewall

You would need product liability insurance and, if selling on a stall or meeting with people to sell, public liability insurance.

You would not be a charity yourself so you would be taxed the same as any other business. Donating it makes no difference.

You would need to register as self employed.

If selling at a craft fair, you also need to consider the cost of having a stall, travel costs and the profit you could possibly make. If selling online, you may have fees and postage to consider.

InsideInsurance

No, you can still be sued if someone has an allergic reaction or something breaks and a kid chokes on it etc. If you want insurance to cover you for this risk is ultimately your choice. The event organisers will often insist on you having at least PL cover.

You'd be sensible to look at both product and public liability insurance, these are often packaged together as a single policy but some public covers don't include product

CP26

Thanks for the posts.

Hmm that sounds like a lot of effort for something that is purely supposed to be fun for me. Completely understand why all that is needed though.

Couple more scenarios;

1) I give it away e.g. by taking it into work and saying 'help yourself' - I'm not making any money but would I still be at risk anything went wrong with a piece, or is it a case of 'taker beware' ?

2) Same as above, but what if I asked for people to make their own donations for anything they took? You wouldn't register as self employed / pay tax for a charity bake sale, would this be the same thing?

Flyonthewall

CP26 wrote: »

Thanks for the posts.

Hmm that sounds like a lot of effort for something that is purely supposed to be fun for me. Completely understand why all that is needed though.

Couple more scenarios;

1) I give it away e.g. by taking it into work and saying 'help yourself' - I'm not making any money but would I still be at risk anything went wrong with a piece, or is it a case of 'taker beware' ?

2) Same as above, but what if I asked for people to make their own donations for anything they took? You wouldn't register as self employed / pay tax for a charity bake sale, would this be the same thing?

1. I'd say it's your responsibility to make sure the items are completely safe. Chances are nobody would do anything unless very serious, but it would be a risk.

2. It would class as selling them as you are effectively asking for money, even making no profit at all (or a loss), you need to be registered as self employed and declare any money you make. Even if it's 1p profit and you donate it to charity. It doesn't matter. Again, you should really be insured otherwise you're taking a risk if anything goes wrong.

CP26

Thanks.

Im struggling to get my head round the charity thing though. When they do the charity bake sales at work I doubt any of the bakers register as self employed...by your post they should be doing as they're technically'selling' something?

It just seems a waste to make all this stuff and have it sit in a drawer, it'd be nice if someone else could enjoy it and a good cause could benefit from it.

Edited to add:
Example 1 here on the HMRC site seems to apply...https://www.hmrc.gov.uk/guidance/selling/examples.htm. Once I've run down my supplies I suspect I'll go and dabble with something else so I'd only sell as a one off thing to get rid of the bits I've made. I don't have the time to turn it into a commercial business and make enough to properly sell at a profit (the idea of a craft fair was just a thing that triggered my train of thought on responsibilities and possibilities).

Flyonthewall

CP26 wrote: »

Thanks.

Im struggling to get my head round the charity thing though. When they do the charity bake sales at work I doubt any of the bakers register as self employed...by your post they should be doing as they're technically'selling' something?

It just seems a waste to make all this stuff and have it sit in a drawer, it'd be nice if someone else could enjoy it and a good cause could benefit from it.

There's nothing to stop you giving them as gifts. Just make sure the items are safe.

I suppose you could donate the items to a charity to sell. I'm not sure what would happen in the case of any problems/injury. I mean, the charity is unlikely to have any details on you or know who donated the items and they've chosen to sell them on. I've seen plenty of unbranded jewellery in charity shops that could easily have been made by anyone.

Charity events by a company should be run properly. I imagine they'll have checked things are above board. If not, they're taking a risk. If you did a donations thing (even as a one off) and gave any money to charity without declaring the money you wouldn't be doing things legally. You'd have the risk of someone telling HMRC you're running a business and not declaring it as well as the risks if something did go wrong.

It may seem silly or a lot of effort, but they can't go making exceptions for people in such situations.

InsideInsurance

CP26 wrote: »

Hmm that sounds like a lot of effort for something that is purely supposed to be fun for me. Completely understand why all that is needed though.

Couple more scenarios;

1) I give it away e.g. by taking it into work and saying 'help yourself' - I'm not making any money but would I still be at risk anything went wrong with a piece, or is it a case of 'taker beware' ?

2) Same as above, but what if I asked for people to make their own donations for anything they took? You wouldn't register as self employed / pay tax for a charity bake sale, would this be the same thing?

Are you asking these questions from an insurance or tax perspective?

The issue is that no matter what your T&Cs etc say that wont stop someone "giving it a go" anyway even if they have no prospects of success. We are all bombarded with the no win no fee calls these days encouraging us to claim.

The reality is that if you get one of these vexatious/ opportunistic claims made against you and start receiving solicitors letters, threats of court, medical reports etc then the probability is you are going to engage a lawyer who then gets them to go away but you are stuck with the bill from your lawyer.

You are the manufacturer of the items irrespective of if you sell them or give them away and so you dont have a get out of jail free card unfortunately.

The reality in most cases is that people chance it without insurance and no one gets injured and so no one loses but there will inevitably be some cases where this isnt the case.

The key one to check is if the event organisors require to you to have at least PL and if they do then breaching your contract with them could cause more of an issue

CP26

Thanks again.

I rang Oxfam and they said they take homemade jewellery to sell on. They would just check it to make sure it looked safe (no sharp / broken bits etc) and that'd be it, they wouldn't need anything else. So that would at least be an option. There also seem to be a few pen pal type things where you can write to someone and send gifts so I might look more into that.

I did ring HMRC but gave up after the millionth request to 'Thank you, so I can direct your query more accurately please tell me more about why you're calling...did you say pay tax on property?'

CP26

InsideInsurance - bit of both really.

The craft fair idea sparked the thoughts as I spotted the PL in their T&Cs - I don't think I'd actually be comfortable selling in that forum and I definitely don't want to do this as a business.

I completely get the insurance element - anything going awry these days is open to a court case. It'd take a pretty special kind of person to sue you for a homemade gift, or something they'd paid 50p for to go to a good cause. (But it probably does happen!)

From a HMRC POV their online example suggests they wouldn't care as I wouldn't be classed as trading. In the case they gave this woman made some cushions and occasionally sold them to friends at cost, it was only when she sold them online more regularly and for profit that they cared. I'd be doing the former and wouldn't even keep the cash as it's not about the money.

This is the first time I've found a hobby that I'm really enjoying but struggling to justify continuing. I'm happy to spend the money to make the stuff but then throwing it in the bin or leaving it in a drawer is a waste - even if a fellow jewellery maker scavenged it for parts in a charity shop would make me happier because the charity at least got some cash for it.