Selling things online whilst claiming?

Kirsty02

I would like to start selling my handmade items online but i'm a single mum claiming benefits. I have looked everywhere for some answers but cant find any. I doubt I would make much profit, if any profit at all so i'm wondering would my benefits be affected if i started up an online shop?

teddysmum

This would be classed as a business, as it's very different from selling items that you no longer need, which would be fine.

nannytone_2

if you're selling things you make then this would be a self employed business.
aka a 'hobby'
why would you sell them at a loss?

HappyMJ

Kirsty02 wrote: »

I would like to start selling my handmade items online but i'm a single mum claiming benefits. I have looked everywhere for some answers but cant find any. I doubt I would make much profit, if any profit at all so i'm wondering would my benefits be affected if i started up an online shop?

If you started an online shop you would really be considered running a business and you'd need to tell DWP/HMRC of your business and keep records.

If you just sold the odd few hand made items each week/month to a few people locally to you through word of mouth then that would be a hobby and no records need to be kept and no tax would be due.

HappyMJ

nannytone wrote: »

if you're selling things you make then this would be a self employed business.
aka a 'hobby'
why would you sell them at a loss?

Careful...profits from hobbies aren't taxed.

Why? If they were taxed you could claim the losses against other income. You can't claim losses from hobbies and you don't pay tax on the odd few pounds of profits.

People sell things they personally make at a loss as they enjoy making the items they get more joy out of that than the money they make.

nannytone_2

HappyMJ wrote: »

Careful...profits from hobbies aren't taxed.

Why? If they were taxed you could claim the losses against other income. You can't claim losses from hobbies and you don't pay tax on the odd few pounds of profits.

People sell things they personally make at a loss as they enjoy making the items they get more joy out of that than the money they make.

but if its a hobby then wtc can't be claimed.

Kirsty02

I'm just wondering if it will be worth trying to do this. If I make profit it will be very small at first. Not anywhere near enough to live on, so if my benefits were to be affected by me going self employed then it would not be worth it. It is something I would love to do though as I can fit this around my son. I just cant seem to find anyone to tell me exactly what will happen.

nannytone_2

if you spend in excess of 16 hours a wek doing it, then you would qualify for wtc.
but you would need t be seriously trying to make it pay.
self employed businesses that make a loss year after year are closely looked at by HMRC.

you need to decide if its a hobby or a serious business proposal

rogerblack

HappyMJ wrote: »

If you just sold the odd few hand made items each week/month to a few people locally to you through word of mouth then that would be a hobby and no records need to be kept and no tax would be due.

Any money that is more than 'de minimus' - over a several pound limit - may be required to be reported to the DWP and affect your benefit.

Even doing things that you could be paid for, but choosing not to, risks this in some cases.

(this is benefits, not WTC).

Exactly what the limit is varies.
For example, if you're on universal credit, and getting help with your mortgage interest, it may be 0.
For IS, as I understand it, it's 5 pounds.

Kirsty02

It's something that would take time building a name for myself and getting customers. I could do it and I think I would be good with advertising. But can I start this without anything changing? Its so confusing. I have my monthly interview there tomorrow so hopefully they'll be able to give me some good information, although the last time I spoke to them about it they didn't even seem to know much about it themselves!

HappyMJ

rogerblack wrote: »

Any money that is more than 'de minimus' - over a several pound limit - may be required to be reported to the DWP and affect your benefit.

Even doing things that you could be paid for, but choosing not to, risks this in some cases.

(this is benefits, not WTC).

Exactly what the limit is varies.
For example, if you're on universal credit, and getting help with your mortgage interest, it may be 0.
For IS, as I understand it, it's 5 pounds.

This activity could still be regarded as a hobby though and won't affect anything.

If I were to take up knitting and spend 10 hours knitting a jumper for Fred down the pub who plays bingo and he gives me £10 to cover the cost of the wool but I've still got half the wool left over so make another jumper for George who saw the jumper and asked if I could make one too and he gives me another £10 although I've made a profit I didn't do it with the intention of making a profit...and who works 20 hours for 50p per hour. It's a hobby nothing gets recorded nothing gets declared to anyone. I would reinvest the £10 in more wool and knit a blanket for myself.

If you're telling me otherwise then the amount of things I've sold on as a hobby and now have to pay back benefits, tax and whatever else...that would send me broke.

If OP sets up an online shop that clearly is a business and detailed records need to be kept and reported to DWP/HMRC.