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

JimmyTheWig

wilson_nz wrote: »

Dare I broach the subject of declaring your earnings of goods sold on Ebay or at Craft fairs etc. I started selling them in September (although I have been selling unwanted stuff on Ebay since 2004) and now have an Ebay shop selling handmade wooden plaques and always worry about the tax situation etc. I have NO IDEA about business and do my plaques as more of a hobby that gives me a bit of spending money only..by no means am I making loads of profit.
Does anyone know what to do about declaring/not declaring? Have always been worried to ask!
Advice please anyone???

Yes, as has been said you need to register as self employed and declare your earnings.
Keep a note of outgoings and incomings and it should be easy to do your tax return (ask someone organised or logical to help you - you don't need a professional).
Doesn't sound like you're earning much, so chances are you won't need to pay income tax or national insurance. Though if you want you can pay national insurance and therefore become eligible for benefits (e.g. maternity allowance, incapacity benefit) in the future...

JimmyTheWig

mkt wrote: »

Starting your own small creative business is a great idea, and so much fun! In early 2006 I decided, with very little experience, to start selling jewellery online - eighteen months on, I have a growing and loyal customer base, enjoy the satisfaction of doing something creative with my Sunday afternoons and have made plenty of profit! I'm not interested in doing this full time - I have a day job that I really like, and I think that sitting in on my own all day with just the cats to talk to might send me a bit funny - but it's been a great way to boost my earnings and I recommend it to anyone.

The thing to realise is that making nice things is only half of the equation - you need to spend at least as much time researching, marketing, shopping around for the best deal on packaging, etc. Lots of people can make really beautiful jewellery, but not half so many can take great photographs of it, describe it really well and make sure that the right sort of customer gets to hear about it!

I only sell my work online, but I avoided Etsy and set up my own site. Etsy, like eBay, is a bit of a crowded marketplace - it's a good, low-cost way of getting started, but it's hard to make any real money there. If you already know a bit of HTML (or you don't mind learning), you can get your own site for around £20 a year. It's very easy to accept secure payments via PayPal using their free cart, and there are a million ways to get your name about on the cheap.

Totally agree about the time spent on marketing, etc. My wife has had loads of good ideas about things to sell, but the hassle of dragging the kids round door to door leafletting just isn't worth it.

She's going on maternity leave soon, but still looking for ideas for 9 months time... You say about the million ways to get your name about. Can you help us out and name a few??


Jim

Justin_GB

I have delivered over 300 leaflets since the other day, it is a way to walk the dog at the same time. So far I have had half a dozen buyers!
I am self employed so every bit goes through the books.
Justin

Frugaldom

Self employment and online traders - it's becoming a minefield, especially as the inland revenue etc can demand to see bank statements, PayPal accounts, eBay trading accounts etc... oh, yes, there are plently of little tricks that can be used, similar to those used by insurance and benefits fraud detection agents. I highly recommend that you download all your info and keep an eye on everything you earn and spend, plus receipts for everything. Depending on your situation, you may also need to pay National Insurance contributions. Don't panic about it, the tax office is a surprisingly helpful place and you can submit your own annual accounts online without the need for an accountant (assuming your turnover is below £15,000 I think). If you are turning over more than this amount, it's a bit of a no-brainer pleading ignorance to the tax man and risking being caught. For all you know, they might OWE YOU money I got a lovely tax rebate from previous employment when I filed my self-employment tax return, so it isn't all bad.

Edited in as an afterthought: I'd be interested in hearing some marketing ideas, too, as advertising is way outside of my budget. For now I use eBid online auctions (setting up new shop there as it is free), myspace, youtube, ebay when there are cheap listing days and I have a website (domain costs of £1.99 each, so nothing glam about it).

nannydiddy

JimmyTheWig wrote: »

Yes, as has been said you need to register as self employed and declare your earnings.
Keep a note of outgoings and incomings and it should be easy to do your tax return (ask someone organised or logical to help you - you don't need a professional).
Doesn't sound like you're earning much, so chances are you won't need to pay income tax or national insurance. Though if you want you can pay national insurance and therefore become eligible for benefits (e.g. maternity allowance, incapacity benefit) in the future...

Hi all, this is a really intesting thread !! So many ideas....anyway...with regards to the above, does anyone know what I need to do as I am already employed full time and paid paye..how do I register with regards to tax....As I would not be self-employed, I have no intention of giving up my full time work - any ideas??? I have desgined a few websites for people and I think I could now make a bit of money. I'm also a bit of a crafter and have few bits to sell.... but I too am worried about getting into trouble with the tax man !!!

any thoughts
Thanks ever so,

JimmyTheWig

nannydiddy wrote: »

Hi all, this is a really intesting thread !! So many ideas....anyway...with regards to the above, does anyone know what I need to do as I am already employed full time and paid paye..how do I register with regards to tax....As I would not be self-employed, I have no intention of giving up my full time work - any ideas??? I have desgined a few websites for people and I think I could now make a bit of money. I'm also a bit of a crafter and have few bits to sell.... but I too am worried about getting into trouble with the tax man !!!

any thoughts
Thanks ever so,

You _would_ be self employed, I believe. You would be employed in your main job and self employed as a second job.
It means that any income you make from self-employment would be taxed at the highest rate you pay as you've already used up your tax-free allowance with your employment.

Don't let this put you off. As nykmedia said, "the tax office is a surprisingly helpful place". Chances are you wouldn't have to pay NI from self-employment.
If you can design websites then you can fill in a tax return.

Frugaldom

As per the above. I am registered self employed and have jobs that are PAYE. I need to calculate in both sets of earnings and then the tax office assesses the difference I owe them or, on some occasions, they owe me

I also pay the self-employed National Insurance Contributions as well as what gets deducted from any employers, but I'm hoping this is a good thing, with regards to pensions etc.

masterkay

RosaThorne wrote: »

Thanks for that - I'm also limited as I don't drive yet (Tesco will be paying for my lessons!!). Where do you get the assessment pack from?

Thanks again

Think about selling online?

Ebay? Start a website?

Frugaldom

Hello to all, I hope you are all busy little bees preparing for your new ventures. Look what I did with the offcuts of wood!

It's a chubby cow wall hanger

Frugaldom

And I now have what I call, the handy new 'WillItFit', as in will it fit through the postal slot.
I've removed the photo just in case it was seen as advertising.