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

Cinders2001

My 14 year old went to a craft day and started a stall so children could craft something for £1.50 a go.

She had lots of takers and earned herself £15 pocket money.
Can anyone tell me the legal side to this please?
Do we declare her earnings?
If so how?
If she does this again do we need an insurance to cover 'something'?

Any help would be great and including any proper uk websites where I can find the answer would be great too.

There seem to be lots of USA sites but not UK one that I can see. And UK law is different.

We want to do things right.

Thanks everyone

Cinders2001

Forgot to add that the venue where the craft is being done lets us go there FOC so I don't suppose we are covered by any of their insurance are we?

simplydevine05

Cinders2001 wrote: »

My 14 year old went to a craft day and started a stall so children could craft something for £1.50 a go.

She had lots of takers and earned herself £15 pocket money.
Can anyone tell me the legal side to this please?
Do we declare her earnings?
If so how?
If she does this again do we need an insurance to cover 'something'?

Any help would be great and including any proper uk websites where I can find the answer would be great too.

There seem to be lots of USA sites but not UK one that I can see. And UK law is different.

We want to do things right.

Thanks everyone

You can't declare her earnings because she has no national insurance number, so technically no different to a paper round although depending on how long she worked she could have been doing so illegally. Under 16's are not allowed to work more than a few hours a week. As far as I'm aware you don't need to declare it but I'm not certain so you are best ringing hmrc. They are very helpful.

simplydevine05

Just reading through some posts and I'm a bit concerned about all those not knowing what public liability insurance is and get it muddled with product liability so here is a guide:

Public liability - only needed when you are dealing with customers face to face ie at fayres or visitors to your property. This will NOT cover you if someone hurts themselves with your product.

Product liability - very important for those making items to sell. This covers if someone hurts themselves with your product ie stabbing from an earring.

Stock cover - if you keep stock in your home and you have a fire, it will not be covered under your home insurance. So aside from actually telling your insurance provider that you run a business at home (vital that this is done or it will render your policy void and can leave you with no help if there is an emergency and a fraud mark left on your records), you also need to look into insuring your stock and equipment.

Employer liability - this is only required when you employ people.

I have all bar employer and I paid £77 for a year with Direct Line. I hope this info helps everyone as there is a lot of assumption product and public liability is the same which can have very serious consequences.

Kirsty x

geordie_joe

simplydevine05 wrote: »

although depending on how long she worked she could have been doing so illegally. Under 16's are not allowed to work more than a few hours a week.

I think work, in this case, means being employed. I don't think there are any restriction on under 16's working for themselves. How would you stop them?

If you look into it, the law probably prevents employers from employing under 16's for too many hours, not the under 16's for working the hours. That's probably why, if an under 16 works too many hours, they prosecute the employer not the under 16.

JimmyTheWig

Fabbyfee wrote: »

I've been considering trying to start selling homemade children's clothes and toys. My main hope is that I can generate some pocket money to make life a little easier when I go back to work (currently on mat leave)

I strongly suggest that you research your market before going into this all guns blazing. I can't imagine, for example, a knitted teddy selling for more than the cost of its wool.
I might be wrong!

2) my home insurance/mortgage said operating a business from the property wasn't allowed - is there anyway round this?

I believe, and again I might be wrong, that as long as you aren't changing the use of the property then it's not an issue. If you're going to turn your back room into a clothes and toys factory, your garage into a warehouse and your front room into a shop front then I think you might have a problem. If you're doing a bit of knitting on your sofa, a bit of sewing at your dining table and a bit of listing at your computer desk then I think you'll be fine.

PaperPenguin

For anyone thinking about using Etsy or Folksy and not sure about which to use, I'd recommend definitely Etsy.

I set up a small shop on both sites last month and have had 8 Etsy sales compared to just 1 on Folksy.

From my experience, Etsy is far more advanced and has tools such as Shop Stats that lets you see how many people each day have viewed your items, the keywords they enter in order to find you etc. This has been useful as i've been able to see which items aren't popular and change them or their descriptions to boost the views. You can link your Folksy shop to Google Analytics but it only gives you stats on your shop page, rather than individual items.

If you're thinking about setting up a shop i'd say just give it a go. Both sites are quite cheap to list on so there's no harm in trying and if it works, they are quite easy ways to make some extra money.

P.S. Thanks to everyone who has added info about HMRC in this thread. I've just read it all and it's been really useful!

Arwenevenstar

Gosh this is a helpful thread!

So, can anyone just advise the best place for me to get public liability insurance please.
This is NOT my main job as I work during the week, however, I'm hoping to run weekend morning and day courses on jam and chutney making, smoking your food, chicken keeping for beginners and quilting from my kitchen to supplement my income.

The public liability site I went on said I also needed professional indemnity as I am giving my advice/teaching rather than making stuff to sell, is this the case?

I was being quoted £200 a year which seems ridiculous when I'm only working on the weekend, people make their own foods, I won't be storing any stock other than a few jars and maslin pans and sugar, fruit and veg will be bought on the day or the day before...seems all a bit officious really.

Can anyone point me in the right direction please.
I have a level 2 food hygiene and contacted my local enviro health chap to start off.

Thanks

JimmyTheWig

Arwenevenstar wrote: »

The public liability site I went on said I also needed professional indemnity as I am giving my advice/teaching rather than making stuff to sell, is this the case?

If, when teaching people how to smoke their food, you give the wrong advice then they go home and follow your advice and become ill you will be liable. Public liability insurance won't cover you for that, as far as I am aware. So that's what you would need professional indemnity insurance for.

Whether £4 a week is worth it for a small-scale operation like this is something that you would need to decide for yourself.

tree33

Just joined the site and have read loads of great ideas!! there are some truly inspirational people out there! I love all sorts of crafting and whilst I don't want to do it full time, I'd love to be able to reduce my hours at work!!!! Anyone feel the same way??? I'm doing my first craft fair in November, wish me luck!!!! :-)