Craft Stall Income Tax Query

lizjwill

I am retired from work with a work pension (greater than £12.5k pa) - I am under state pension age. I have been selling items at a few local craft fairs and am now conscious maybe I should be looking at what I should be doing re tax etc. I need to weigh up whether its worth me continuing to do what effectively started as a hobby.
I have started to read up but am confused - I think I need to register as a sole trader and register for self-assessment. However, if I do this I'm assuming any profit I make will be taxed at 20% as my pension is above £12.5k. Also, if I'm registered as a sole trader do I also have to pay National Insurance?
To be honest if I am right - for a hobby this is becoming a lot of hassle. Any advice of reference points will be gratefully received.

Flugelhorn

depends how much - there is £1000 trading allowance - would that cover it?


https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#full-publication-update-history

lizjwill

thanks look like I have some work to do

sheramber

You do not need to register as self employed if your turnover is less than £1000

If it is over £1000 you need to register and complete a self assessment tax return after the end of the tax year.

You can claim the trading allowance of £1000 against your turnover instead of expenses.

e.g turnover £2000, trading allowance £1000 = profit £1000

If your expenses are only £500 you can still claim the flat rate trading allowance of £1000

If your expenses are more than £1000 then you would claim your expenses

Turnover £2000 expenses £1500 - profit £500


As you are under state pension age have you checked your state pension forecast?   You may need to pay National Insurance to  get the full state pension.

https://www.gov.uk/check-state-pension