£1000 trading allowance query

Britannia12345

I sometimes sell the results of my hobby to fund more materials for the hobby. I keep reading online that if I sell the things I make I have to register as a business if gross income goes over £1000. Does this include postage? Most of what I make gets sent abroad, especially the US and the postage rates are ridiculously high right now. Often the postage is many times higher than the value of the sale. So is the £1000 allowance for total sales or sales and postage combined? 
I've looked everywhere but can't find an answer to this. 

unholyangel

If you have more than £1000 in self employed income (before costs/expenses are deducted) then you would be required to register for self assessment. The reason the limit is is set at £1000 is because of the trading allowance. You can claim either the trading allowance or actual expenses/costs, not both. 

So yes, postage is included in the £1000. 

You describe it as a hobby. Have you checked that it qualifies as a trader?  I can see the profit seeking motive clearly enough but the rest may be worth considering. 

Britannia12345

I'm not sure. I make far too many things then sell them on ebay to allow me to make more. Would that make me a trader? It's all really confusing. I'm not hoping to make a business out of it, just clear some space to allow me to indulge my hobby some more. 

unholyangel

Britannia12345 said:

I'm not sure. I make far too many things then sell them on ebay to allow me to make more. Would that make me a trader? It's all really confusing. I'm not hoping to make a business out of it, just clear some space to allow me to indulge my hobby some more. 

Sorry, I possibly shouldn't have mentioned it since HMRC are probably only going to challenge it if you want to claim losses and you didn't mention any losses. 

Is this your only income? If so then you would also have your personal allowance to use against any income from your craft. 

If it's not your only income then as a workaround (to postage pushing you over the 1k) you could also ask your buyer to organise their own delivery. That way, your turnover would only be for the item. But this might impact a customers willingness to buy from you. 

Jeremy535897

Do you have a business account on Ebay? HMRC will probably assume you are trading if you do.

For what constitutes a trade, see: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

meatandtwoveg

Jeremy535897 said:

Do you have a business account on Ebay? HMRC will probably assume you are trading if you do.

For what constitutes a trade, see: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

Can you claim the trading allowance if you are working from home trading stocks and shares as a day trader.
Can you also claim the WFH allowance.
Cheers

Jeremy535897

meatandtwoveg said:

Jeremy535897 said:

Do you have a business account on Ebay? HMRC will probably assume you are trading if you do.

For what constitutes a trade, see: https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

Can you claim the trading allowance if you are working from home trading stocks and shares as a day trader.
Can you also claim the WFH allowance.
Cheers

See my answer on your thread today. It is extremely unlikely you are trading when you buy and sell stocks and shares, and you said you have not declared yourself as a sole trader. The trading allowance can only be set against trading income. 

Albermarle

My OH dabbles on e bay and I have been checking various points for her, but I am not totally clear on this £1000 issue.

It seems like there are two issues that sometimes get confused ?

If your turnover of traded goods ( using the HMRC definitions ) is over £1000, you should register with HMRC as a trader/self employed .

Separately you can earn £1000 profit and not have to register it with HMRC due to the trading Allowance.

So for example if you have a turnover of £2000 and a profit of £500, you have to register with HMRC as a trader but do not need to submit any actual turnover and profit figures to them .

Have I got this right ?

Dazed_and_C0nfused

No, the Trading Allowance is an option if you don't want to claim expenses in the traditional sense.

So if you have turnover £2,000 and profit of £500 you cannot also claim the Trading Allowance.

Your taxable income from this source is £500 not £0