Earning Income from a Hobby

SiCarr87

Hello All

Looking for some advice/tips on the possibility of earning income from a hobby

Its obviously easy knowing how to do the hobby that i partake in, and sell the items, but its more so the Income Disclosure i am looking for advice on

In a nutshell, is there a maximum to earn before advising HMRC (i.e. £5,000 per annum)

Please also bear in mind that my Wife (who is the Hobbyist) also works and collects a PAYE wage of in and around £11,000 per annum.

Do we have to register as a business and fill in Tax Returns and all that

Thanks in advance

asajj

http://forums.moneysavingexpert.com/forumdisplay.php?f=22

Also no, you have to register with HMRC if you intend to become a self-employed person. There are annual personal allowance rules etc.

Registering HMRC doesn't mean you will pay tax right away. You need to make a profit.

However for a such a serious matter, I'd suggest to contact HMRC. They also have online sources to help.

craftingmad

I make handmade bits and bobs and sell them at craft fairs. I am registered as self employed with HMRC and pay class 4 (I think) NI contributions.


I have actually been registered for about 4 years now and because of the small amount I actually earn I have never had to pay tax as I can claim back against my profit most of my costs associated with the items I make.


You really do need to register with HMRC that you are selling the items your wife has made as if not you could get into a lot of trouble. When I spoke to them they were lovely and really helpful. Maybe take a look on their website to see if this can help you further?


Good luck with your venture

Al1x

Yes the above posters are correct, you do need to register with HMRC straight away. Also whenever I have called them they have been really helpful as well.

SiCarr87

Thank you craftingmad - im secretly looking forward to helping my wife with these!

We are just at the stage of choosing the name of the business, and as soon as we have, a call to HMRC will be made

Without being too intrusive, are you amounts you have made selling your wares over £4000? Is this also a second income source for you?

Our possible forecast (with pre-booked orders etc) would suggest that she would make circa £400 income per month (£320 Profit) - making it around £4500-£4800 per annum

Thanks in advance


Simon

asajj

By the way, what sort of craft we are talking about?

On Craft forums on MSE I saw people talking about craft insurance if you want to sell your crafts but not sure if it applies to all sorts of crafts

SiCarr87

Thanks for the reply asajj

Its going to be the candle melts and what not

Funny you should mention about Craft Insurance, i myself am an insurance broker, and our firm has just started a craft insurance scheme

asajj

Ah ok! Most of I read were knitters I believe! I couldn't find the actual thread but couple of discussions

https://forums.moneysavingexpert.com/discussion/3261082

https://forums.moneysavingexpert.com/discussion/3911819

https://forums.moneysavingexpert.com/discussion/2927850

Some of these mention candles, soap etc and potential issues so might help

craftingmad

SiCarr87 wrote: »

Thank you craftingmad - im secretly looking forward to helping my wife with these!

We are just at the stage of choosing the name of the business, and as soon as we have, a call to HMRC will be made

Without being too intrusive, are you amounts you have made selling your wares over £4000? Is this also a second income source for you?

Our possible forecast (with pre-booked orders etc) would suggest that she would make circa £400 income per month (£320 Profit) - making it around £4500-£4800 per annum

Thanks in advance


Simon

Hi Simon,

I am a stay at home mum so only work when hubby is off shift or my mum can look after the kids. I make all sorts of little bits but mainly work with fabric and paper. All of my items sell for less than £10 each (with most selling for less than £2) so the majority of the time my earnings are less than £4000. However I have had a couple of "good years" in the past where my earnings were over £4000, but after all my allowable expenses I still did not have to pay any tax.

Obviously your situation will be slightly different as you also have a full time job but talk to hmrc and ask them to tell you about all the tax deductable allowances and expenses you are allowed. These will all help reduce your tax bill hopefully

Hope the venture goes well and you enjoy working together

SiCarr87

Thank you craftingmad