Selling crafts while on ESA

scotslad2k

Hi,
I'm not sure I have asked this before but here goes.

I am on life long benefits due to autism and anxiety, I don't get pip or UC. I have started to learn to carve wood and was wondering if I can sell some of my carvings to buy more wood. Where ever I look I either have to detail every item and why
at I may sell it for then have that same amount taken off my benefits which makes it pointless to even try. HMRC says I MUST register as a business even if I only sell one carving, its a hobby, never a business, I don´t want to earn a living from it, I just want to be able to continue carving so it´s only the cost of buy the correct type of wood.
I cant even receive wood for a carving as, according to dwp, the value of the wood received is classed as a transaction and is removed from my benefits. 

I have looked at ´Allowed work´ but it doesn't apply as I need to note hours carving and STOP when I get to 16 hours within a working week, that´s not how carving as a HOBBY works. I feel as if the system doesn't want me to do anything to improve my quality of life, I feel like I am being punished for not being able to work and for trying to improve my quality of life. 

I was able to buy a little wood before this whole cost of living crisis hit and by a little, I mean spend about 10 pounds in a three month period. The days, that 10 goes into food and fuel and on a weekly basis. I have even considered breaking the law and just selling a few pieces to help with living costs but my autism prevents me from doing so as I am a very honest and open person yet I hear others telling me to just do it as the chances of being caught is very low. I refuse to do that but may have to consider giving up carving just to feed myself and pay fuel bills.

FYI, I don´t need trolls telling me to get a job, I know life is tough for everyone. To put it into context, I don´t smoke, drink, take drugs, drive or go on ANY holidays and I am struggling. Carving is my ONLY non-essential think I do and I just want to continue as it helps with my anxiety which is chronic and I do take medication (life long).

I would greatly appreciate someone to look into this and get back to me.

I post all my carvings on Instagram, partly to keep a visual record for myself and also hoping to inspire others to take up a hobby. If anyone wants to look to see how my carving is coming along its on Instagram, search for scotslad2k.

MovingForwards

You did ask before and were given a lot of information on what you can do, here's your previous thread:
https://forums.moneysavingexpert.com/discussion/6333142/where-do-i-stand/p1

Nothing has changed.

Spoonie_Turtle

scotslad2k said:

HMRC says I MUST register as a business even if I only sell one carving, 

No they don't.  You only have to register with HMRC as self-employed (a sole trader) if you are paid more than £1,000 in a tax year for what you sell.

I cant even receive wood for a carving as, according to dwp, the value of the wood received is classed as a transaction and is removed from my benefits.

What have you found that makes you think that?

Also, are you certain they deduct money from your ESA at all?  I was told here that they don't take off money for earnings from permitted work https://forums.moneysavingexpert.com/discussion/comment/79359096/#Comment_79359096

poppy12345

Spoonie_Turtle said:

Also, are you certain they deduct money from your ESA at all?  I was told here that they don't take off money for earnings from permitted work https://forums.moneysavingexpert.com/discussion/comment/79359096/#Comment_79359096

That's correct, they don't. If someone is self employed they would need to report earnings and expenses. If you earn more than the maximum amount per week then your ESA simply stops.

huckster

poppy12345 said:

Spoonie_Turtle said:

Also, are you certain they deduct money from your ESA at all?  I was told here that they don't take off money for earnings from permitted work https://forums.moneysavingexpert.com/discussion/comment/79359096/#Comment_79359096

That's correct, they don't. If someone is self employed they would need to report engs and expenses. If you earn more than the maximum amount per week then your ESA simply stops.

Scotslad can attend Job Centre after booking appointment. I believe there is a  form  that needs to be completed and then as poppy says, it is a case of reporting income & expenses, so ESA can see whether net earnings have exceeded £152 ( current limit) per week. 

Info from Scope

https://www.scope.org.uk/advice-and-support/self-employment-benefits/

tightauldgit

If you buy wood at £5 and carve it and sell that carving for £5 then your earnings are £0 so HMRC won't care in the slightest. Given that, if its genuinely a hobby you should be able to sell the items at the cost of the materials without having your benefits affected at all. If you don't actually aim to do it as a business then it shouldn't even be a case of being self-employed - I don't think it would meet the DWP definition of being self-employed.

Spoonie_Turtle

tightauldgit said:

If you buy wood at £5 and carve it and sell that carving for £5 then your earnings are £0 so HMRC won't care in the slightest. Given that, if its genuinely a hobby you should be able to sell the items at the cost of the materials without having your benefits affected at all. If you don't actually aim to do it as a business then it shouldn't even be a case of being self-employed - I don't think it would meet the DWP definition of being self-employed.

We usually say only Decision Makers can determine that but in this case I think we can fairly confidently say it is extremely likely that it wouldn't - the effort involved is purely for therapeutic purposes, not with the expectation of profit.  [Whereas if OP did sell for profit or took commissions, that would be different - but still allowed as long as it were declared and under the earnings threshold for Permitted Work.]

(Re: HMRC that's incorrect, the £1,000 trading allowance is income not profit - but first they'd have to even be classed as trading which OP entirely possibly wouldn't be, as things stand.)

scotslad2k

@Spoonie_Turtle I have asked the dwp and HMRC, as with the dwp, yes, I can earn £152 but no more than 16 hours a week and be working for someone, wage slips need to be submitted as well as time worked. For HMRC, selling 1 crafted item would class me as a business and would therefore require me to register as a small business which would in turn would require me to fill in a lengthy firm, submit receipts etc. As I stated before, it's a hobby and not a business, it's also not work and as I would be working for myself, I wouldn't be eligible for limited work. Also, I found out that while on benefits, we aren't allow to receive gifts of money without declaring it, if it's more than £5 then it is deducted from the benefits.

As far as receiving an item (instead of cash) for a carving, that too must be declared and if it's deemed to be valued if £5 then the value is deducted from benefits.

All this information is from both HMRC and DWP websites. Plus confirmed via a phone call with DWP, therefore I no longer carve bought wood and only carve the odd but of branch as I can't afford to buy wood any more.

@Administrator please lock this thread as resolved, thank you.

poppy12345

scotslad2k said:

@Spoonie_Turtle I have asked the dwp and HMRC, as with the dwp, yes, I can earn £152 but no more than 16 hours a week and be working for someone, wage slips need to be submitted as well as time worked.

Permitted work is now £167/week and less than 16 hours. If you work 16 hours then there will be no entitlement to ESA. https://www.gov.uk/government/publications/employment-and-support-allowance-permitted-work-form/permitted-work-factsheet

You can be self employed if doing permitted work. When self employed you do not need to register with HMRC unless you earn more than £1,000 anually. https://www.gov.uk/register-for-self-assessment/self-employed

HillStreetBlues

Personally I don't see it as a commercial enterprise, as there isn't any benefit if OP is just getting the money back he paid for the wood, so would be a hobby.
If someone was giving the OP wood and then that person sold the carvings then that would be a commercial enterprise even if the OP gained nothing.

Spoonie_Turtle

scotslad2k said:

@Spoonie_Turtle I have asked the dwp and HMRC, as with the dwp, yes, I can earn £152 but no more than 16 hours a week and be working for someone, wage slips need to be submitted as well as time worked. For HMRC, selling 1 crafted item would class me as a business and would therefore require me to register as a small business which would in turn would require me to fill in a lengthy firm, submit receipts etc. As I stated before, it's a hobby and not a business, it's also not work and as I would be working for myself, I wouldn't be eligible for limited work. Also, I found out that while on benefits, we aren't allow to receive gifts of money without declaring it, if it's more than £5 then it is deducted from the benefits.

As far as receiving an item (instead of cash) for a carving, that too must be declared and if it's deemed to be valued if £5 then the value is deducted from benefits.

All this information is from both HMRC and DWP websites. Plus confirmed via a phone call with DWP, therefore I no longer carve bought wood and only carve the odd but of branch as I can't afford to buy wood any more.

@Administrator please lock this thread as resolved, thank you.

As poppy has pointed out you do not need to register with HMRC unless your income from sole trading exceeds £1,000 in a tax year.

I don't know why you're asking DWP phone call handlers because they rarely know the answers to queries and often give out incorrect advice just to get people off the phone.

Yes of course you need to declare any income to DWP but the PW1 (permitted work form) only says working above the thresholds will affect your benefit.  And for self-employment actual income is worked out as income minus expenses, so if you only sell at cost then you're earning nothing.

https://www.gov.uk/government/publications/employment-and-support-allowance-permitted-work-form

The PW1 form also specifically asks whether your work will be self-employment, therefore you clearly do NOT have to work for someone.  I did a little freelance work while I was on JSA (income-related, so it was deducted from my benefit) and they accepted a signed receipt.  If you sold via the internet then proof of the payment or completed listings would do the job too.

It's up to you whether you wish to still restrict yourself like this but you should be aware it is based on a flawed understanding.