hobby or business?

redstarbelgrade

What is the difference between a business that makes no profit and a hobby that doesn't pay for itself? As an artist i spend more on materials, exhibition costs etc than I ever make in sales of pictures, cards or reproductions. I'm in the process of building a website and i use social media, but so far I haven't attempted to sell online.
I'm not allowed to run a business from home, but could I be accused of doing so?

Pennywise

I think that by building a website with options to purchase, that means you're trading as a business. If your website was simply to display your artwork purely for interest and you didn't intend to sell anything, then it's a hobby. When you actually sell something, then it's definitely a business.

martindow

Who or what says you can't run a business from home? In your case you are painting for a hobby and selling using a computer so it is hard to see that there would any issue being raised by this. A lot of people have a home office without problems.


It would be different if you were running a business with large numbers of people coming to the door and causing parking problems or had an intrusive business like scrapping cars or renting rooms to heavy metal bands to practice in.

redstarbelgrade

martindow wrote: »

Who or what says you can't run a business from home? In your case you are painting for a hobby and selling using a computer so it is hard to see that there would any issue being raised by this. A lot of people have a home office without problems.


It would be different if you were running a business with large numbers of people coming to the door and causing parking problems or had an intrusive business like scrapping cars or renting rooms to heavy metal bands to practice in.

There's a restrictive covenant on all properties on the estate, and although a number of 'businesses' have operated in recent years the management company have announced that they're clamping down on it. Unlike some, what I do involves no traffic, noise or disruption to anybody, but of course that isn't the definition of 'running a business from home'.

redstarbelgrade

Pennywise wrote: »

I think that by building a website with options to purchase, that means you're trading as a business. If your website was simply to display your artwork purely for interest and you didn't intend to sell anything, then it's a hobby. When you actually sell something, then it's definitely a business.

Thank you, Pennywise. So far sales have been through exhibitions or to friends, though I would like to be able to have a shop on my website.
I do complete a self-employed tax return as I was advised some years ago that I should (and of course it's the right thing to do), but my turnover is always zero as my allowable expenses always exceed any sales I make. I hope this won't always be the case but I'm a bit stuck if that constitutes 'running a business from home'.

Aquamania

redstarbelgrade wrote: »

What is the difference between a business that makes no profit and a hobby that doesn't pay for itself? As an artist i spend more on materials, exhibition costs etc than I ever make in sales of pictures, cards or reproductions. I'm in the process of building a website and i use social media, but so far I haven't attempted to sell online.
I'm not allowed to run a business from home, but could I be accused of doing so?

A hobby is an activity done in your leisure time for pleasure.

A business that makes no profit could be a badly run business. It certainly won't last long.

So, you need to ask yourself are you doiung this simply in your leisure time for plaesure, or are you no good at running a business?

Why do you do it?
What is your aim, both short term and long term?
Do you have a full time job? If so, doing what? If not, why not?
How much time does this artistry activity take up?
Would you carry on this activity, even if it meant paying for materials & exhibitions yourself, for no income at all?
Why are you building a website? What is it's aim? Are you paying for that too? Will you be happy to continue to pay for that even if it generates no income?
etc, etc

I suggest you probably know full well what this activity actually is, but are trying to find reasons to suggest to others why it is not.

Aquamania

redstarbelgrade wrote: »

Thank you, Pennywise. So far sales have been through exhibitions or to friends, though I would like to be able to have a shop on my website.
I do complete a self-employed tax return as I was advised some years ago that I should (and of course it's the right thing to do), but my turnover is always zero as my allowable expenses always exceed any sales I make. I hope this won't always be the case but I'm a bit stuck if that constitutes 'running a business from home'.

Yes you are attempting to run a business.
You are just incredibly bad at doing so.
Pay out a bit more, and get some expert advise on how to make it a going concern.

Luke86

Royal Mail Virtual Mailing Address. Problem solved.

redstarbelgrade

Aquamania wrote: »

A hobby is an activity done in your leisure time for pleasure.

A business that makes no profit could be a badly run business. It certainly won't last long.

So, you need to ask yourself are you doiung this simply in your leisure time for plaesure, or are you no good at running a business?.

I don't expect to sell paintings - they're an expensive luxury. In that sense it's a hobby or an academic pursuit and there's always an interesting dialogue with other artists. It's what I do in my spare time (yes I do have a job).
Painting at the kitchen table isn't really the issue.

Obviously it's great when somebody does want to buy something in an exhibition. But does that cross the line into 'running a business from home'?
Putting a shop on my website and selling from there is a step further of course.

Is the restrictive covenant (no running a business from home) a common thing? If I look to move house, am I going to come up against this everywhere else anyway?

redstarbelgrade

Luke86 wrote: »

Royal Mail Virtual Mailing Address. Problem solved.

Can you have that as the address of the business?

Savvy_Sue

redstarbelgrade wrote: »

Is the restrictive covenant (no running a business from home) a common thing? If I look to move house, am I going to come up against this everywhere else anyway?

It's a fairly standard clause in a tenancy agreement. With a social landlord, permission can be sought and shouldn't be unreasonably refused, unless the business is going to impact on the neighbours. Which painting at the kitchen table probably isn't. If you were going to have potential buyers visit your 'studio' on a regular basis, or give up work and have weekly deliveries of canvases and paints, it might.

With a private let and / or a mortgage it can be more complicated, sometimes it's a clause in the mortgage agreement, and if you're renting privately the landlord may not want the hassle of seeking permission, and it may be refused anyway.