Start a 'cottage industry'... official MoneySavingExpert.com discussion

GavB79

nykmedia wrote: »

I think you might be confusing income tax with VAT and you can only claim that if you're VAT registered. Being employed and self employed means you'll pay tax on all profits, but there's nothing to stop you registering (to make it all legal) and then just concentrating on making it break even for the time being. You'll also need to check your contract of employment, as some contracts state in them that you cannot work elsewhere at the same time without their permission. None of it is complicated, just a case of speaking to your employer and registering your other interests with HMRC. If it's something you enjoy doing, it will be fun making it pay for itself and any 'profits' after deducting all allowable expenses can always be reinvested back into your business. You really did need that new workroom redecorated and those magazine subscriptions are so you can keep up with the competition! :cool:

Exactly, you are taxed on profits. So if you are making craft items, you can deduct the costs of your materials. E.g. if you make a card which cost you 50p in materials and you sell it for £2, your profit on that particular card liable to be taxed is £1.50. Obviously it is a little more complicated, as you have to add all of your sales together and all of your expenses together to arrive at your gross profit.
Similarly, if you host a website, the hosting fees are a business expense and deducted before profit is calculated, and so on.

I think YOU might be confusing VAT, not sure why you brought it up. Ok the choice of terminology of 'tax rebate' isn't right, you just don't pay the tax over in the first place. I'm pretty sure this is what the poster meant.

EDIT: And yes it's perfectly acceptable to make a loss, which if you have a PAYE job too will result in a tax refund

googler

I wouldn't recommend registering for VAT unless you absolutely HAVE to, i.e. your turnover is or will be over the minimum level specified by HMRC.

On the other hand, if you relish the prospect of being an unpaid tax collector for Her Majesty's Government, with all the record-keeping that implies, and you like the idea of taking in 15% of every sale, only to have to ring-fence that money so you don't spend it, in case it's needed to pay the taxman three months later, then - go ahead and knock yourself out.

tiddly_widdly

https://www.country-markets.co.uk

Frugaldom

Thanks tiddly widdly Had a quick look and now going looking for a Scottish equivalent as that one stops at the border.

JimmyTheWig

galatea34 wrote: »

Now I'm on maternity leave
...
maybe I would have enough to start a small self-employed sideline.

Note that if you are working, even self-employed, then you won't be able to claim maternity pay for those weeks.

JimmyTheWig

googler wrote: »

I wouldn't recommend registering for VAT unless you absolutely HAVE to, i.e. your turnover is or will be over the minimum level specified by HMRC.

The only possible exception to this is if you are mainly supplying businesses. Then they will be able to claim back the VAT they have paid to you, so you may as well claim back the VAT that you have paid out.

yaharni

Hi I am also new to this thread and am in the middle of setting up my own little 'cottage industry'.... I have also found a site called Folksy which is very similiar to Etsy but UK based. You can register and set up a site on their to sell your stuff. Best of luck..

galatea34 wrote: »

Hello - have been reading this thread for the past few days on and off - it's great.

Now I'm on maternity leave I finally have a bit of time to think about making things more seriously (but not much time, what with the 4-month-old!) - I always have projects on the go and thought that if I made smaller things maybe I would have enough to start a small self-employed sideline. :j

Anyway, I'm trying to find out what the best way of getting my own website is - that way I can set it up and maybe start some kind of blog, though who'd want to read it I don't know! Meanwhile, I thought I might try Etsy, which my site could link to, as a way of potentially attracting more attention/possible customers.

Plus, if I register as self-employed, I can count money I spend on materials as a business expense which might help towards a tax rebate, right? Assuming I use the materials for some vaguely business-related activity, such as research, even if I don't actually sell anything?

I'm hopeless - I'd really appreciate some advice from your knowledgeable selves! :T

sunskirty

Hi Galatea...i've been looking for ideas too: found a German based website called DaWanda which is similar to Etsy, also Craftster.org which has some ideas in their Community section about Crafty Business Advice - hope this helps: all the best!!

karren

Hi, ive posted before about my jewellery making scheme, and ive sold a few pieces in fetes etc adn rang around all the local schools to thier school fetes, but now alas im stuck as ive made tons but cannot think of ways to sell them!!!1
Anyone out there feeling inspired??

MoKa_2

galatea34 wrote: »

Plus, if I register as self-employed, I can count money I spend on materials as a business expense which might help towards a tax rebate, right? Assuming I use the materials for some vaguely business-related activity, such as research, even if I don't actually sell anything?

You will also be able to account for some of your overheads. I'm not 100% sure but you should perhaps consult with an accountant because I think if you can find some reference on what an appropriate hourly charge for your time would be, and then properly account for your time with timesheets or similar, then I don't see how the revenue could dispute that your labour costs should be included in the cost of making the finished item. Likewise (and I do know this bit for sure) if you are using a separate room in your house as a work room, you can take the number of rooms in your house (say, 4) and then take one quarter of your utility bills (and rent, but not mortgage) and deduct that from your overall profits too.

Hope this helps, and good luck!