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

JimmyTheWig

Yes, it's a business, so you'll need to register with HMRC. You can get a small earnings excemption for national insurance contributions so you don't have to pay that.
If this is your only income then it doesn't sound like you'll be liable for income tax, either.

But you still have to register.

firefox1956

LA989 wrote: »

Hi
I'm looking at starting making jams and jellies to be sold in christmas hampers, I'm hoping to start this for christmas 2015 shopping season. Could people advise if I need to register with HMRC, as I am not expecting a high profit and will only be selling in the few weeks running up to christmas (at markets etc.)

I'm going to get food and safety level 2 certified and I'm trying to find out if I will need to be registered under food standards agency as a food business but us there anything else I'm missing?

Thanks

You will need public liability insurance.
You will need to have you kitchen inspected by your local Environmental Health Officer & meet the requirements they lay down.
You will need to contact Trading Standards ( or whatever they are called now ) for advice on labeling i.e allergy advice, fruit content etc etc etc.
You will need to do some detailed costings to make sure you are making a profit.....
HTH

ALeafFromThePast

I started binding notebooks from scratch in 2012, and in November last year I put some on sale in a gamers caf! to see if they would sell. I've since sold five batches of them but then realised that although I've only made about £150 profit in a year (sales are slow) I need to register for tax. I have several problems however and I'm not sure what to do.

1. My girlfriend says I don't need to register as I am doing crafts which is apparently exempt, and to back this up none of you seem to have mentioned tax when selling crafts, just the profit margin. Do I need to register now or if I go onto do craft fairs?


2. When I went on HMRC, they say you need to register for tax within three months of my first sale, but I don't know if this is for corporations. Plus, will they fine me because I didn't register? And how much am I looking at?


3. I looked all this up a bit too late and it turns out that tax returns for this year have to be handed in by 5th October? Would they fine me for registering late? Even if I'm not selling enough?


I'm so lost and confused because I know I may need to register if I sell more frequently, but not sure if they can fine me for my procrastination... or if I even need to register at all.


I'm not employed due to health reasons and CLAIM NO BENEFITS AT ALL. I left college with CFS and am still recovering so I was not ill enough to claim (plus I would have been even more ill with pressure on my back if I claimed job seekers or anything) I thought as I am creative and organised, crafts would be a good place for me to find my feet.


Is there anyone who can answer this please?

tattycath

As far as I'm aware. If you are buying/making stuff to sell on, you are running a business and as such need to register with HMRC. If I were you I would get in touch with them straight away. You have until 31st January 2015 to fill in tax return online.
If your profits for the year are less than £5,800 (I think that's the thresh hold) you can fill in a form so you are exempt from paying class 2 national insurance contributions.

JimmyTheWig

ALeafFromThePast wrote: »

I started binding notebooks from scratch in 2012, and in November last year I put some on sale in a gamers caf! to see if they would sell. I've since sold five batches of them but then realised that although I've only made about £150 profit in a year (sales are slow) I need to register for tax. I have several problems however and I'm not sure what to do.

£150 is still £150. Good for you.
If you saw £150 in the street I'm pretty sure you'd stop to pick it up! So assuming that this is something that you enjoy doing and you couldn't be using your time better elsewhere then making £150 from it is great.

1. My girlfriend says I don't need to register as I am doing crafts which is apparently exempt, and to back this up none of you seem to have mentioned tax when selling crafts, just the profit margin. Do I need to register now or if I go onto do craft fairs?

I don't believe that crafts are exempt.
People don't tend to mention tax either because they accept that they have to pay it or they earn under the threshold and so don't pay it.
You can earn up to around £10k a year (profit) without having to pay tax. [Note that this is the total of all your taxable income.]
So it looks like you won't be paying tax (unless things take off dramatically!). But you still need to register as self employed with HMRC and still will need to do a tax return (they're not too bad).

2. When I went on HMRC, they say you need to register for tax within three months of my first sale, but I don't know if this is for corporations. Plus, will they fine me because I didn't register? And how much am I looking at?

The three month rule does apply to you, so get registered as soon as you can.
Are you sure you didn't start within the last three months?

3. I looked all this up a bit too late and it turns out that tax returns for this year have to be handed in by 5th October? Would they fine me for registering late? Even if I'm not selling enough?

You can file a tax return online up until January.
If you can register and post on a forum like this you can file a tax return. It's not that difficult.
Don't leave it until the last minute, though, as it takes time to register.

gayleygoo

I sell on Etsy and am enjoying it. If anyone is considering giving it a go, see if you can get a referral from another Etsy shop owner as you'll both get 40 free listings that way (I found this out only after opening my shop!)

Etsy is good for handmade products, vintage items and craft supplies. Shoppers expect to pay more on Etsy because it is more like lots of little "boutiques" rather than bargain hunting on ebay

Mind_Game

I'm planning to start an Etsy shop. I'd sell vintage finds from charity shops and my own craftsy things. I'm currently learning to sew, so I could "upcycle" things or simply make things. I can already knit, but don't currently have any wool/yarn, or needles for that matter. Those could be acquired cheaply, though, I imagine. Would this be a good idea? What sort of cut does Etsy take from your sales?

Wish_I_knew

Ok, so I made my son an ornamental window dressing for his room, I have since looked online and thought maybe there is a gap in the market for this? Where do I go from here? I know Im capable of making them, but can I sell them? Do I need safety testing? Do I need liabilty insurance? Do I need a lawyer? A patent? What are the minimum requirements to begin a cottage industry? Can I sell personally or do I have to set up a business? What happens if something goes wrong? I wish I knew... please help if you do...