Selling for charity

ANGELFLOWER

Hi, if I have a stall at a fete and sell items to raise money for a charity how does this work with tax and self assessment? I will be making crafts and selling, and then donating the profits. Would these profits, even though I am giving to charity be taxable? I have searched Google and have read conflicting info. I am unsure if I will make over the £1000 tax return exemption, but it is possible, but if so there would be a requirement for a tax return?
Would it make a difference if I asked for a donation for the items rather than a set price, as in a donation amount pay what you feel/suggested donation? Thinking about charity donations for Poppies for example where you are donating rather than purchasing.

Thanks.

Misslayed

Moved to tax board

Grumpy_chap

ANGELFLOWER said:

Hi, if I have a stall at a fete and sell items to raise money for a charity how does this work with tax and self assessment? I will be making crafts and selling, and then donating the profits. Would these profits, even though I am giving to charity be taxable? I have searched Google and have read conflicting info. I am unsure if I will make over the £1000 tax return exemption, but it is possible, but if so there would be a requirement for a tax return?
Would it make a difference if I asked for a donation for the items rather than a set price, as in a donation amount pay what you feel/suggested donation? Thinking about charity donations for Poppies for example where you are donating rather than purchasing.

Thanks.

Arguably, you are not donating the profits.
It could be said that you are donating the materials, and donating the time to make the materials into sellable craft items and donating the time to operate the stall to sell the craft items. 
Having been donated the materials and the two lots of time, the charity sells the items and the charity receives all the income.
It would be quite possible for you to split that into two tasks by two people - you donating the time plus materials to make the craft items plus a.n.other donating the time to operate the stall.  I don't think in that case, the second person operating the stall would consider that they donated the profits.

As for asking for a donation, you might well then yield a very small return as many people seem to think of "donation" as pocket change values.

soolin

ANGELFLOWER said:

Hi, if I have a stall at a fete and sell items to raise money for a charity how does this work with tax and self assessment? I will be making crafts and selling, and then donating the profits. Would these profits, even though I am giving to charity be taxable? I have searched Google and have read conflicting info. I am unsure if I will make over the £1000 tax return exemption, but it is possible, but if so there would be a requirement for a tax return?
Would it make a difference if I asked for a donation for the items rather than a set price, as in a donation amount pay what you feel/suggested donation? Thinking about charity donations for Poppies for example where you are donating rather than purchasing.

Thanks.

This might be complicated depending on the scenario. Are you selling on behalf of the charity, ie do you display their official registration number and pay direct to their account ? Or do you take the money, work out the 'profit' and send them that as a donation?

If the former, then get it in writing that you are selling on their behalf and if questioned by HMRC show them that as proof. If the latter , then you are a sole trader and would need to declare as such and prepare accounts. Making donations to charity, except in some higher rate tax situation, doesn't get written off against profit  - it is completely separate, so for instance I run a small business, I'm also freelance/self employed in a completely different industry and make charitable donations - but those donations are out of my net taxable income. I have in the past donated made items to a stall, and helped man it- but the money was handled by charity representatives and I was selling as the charity, with a fully branded stall and charitable details available, I was not selling as myself. 

In reality HMRC cannot police every fair or market so realistically you may never be questioned, but best be forewarned. You also face the issue of insurance, most fairs now require that , who will be paying, you or the charity? 

Donations might work if you use an official sealed box from the charity , but then you would be donating the lot, not just profit and would be paying for materials and insurance and  on costs at your own cost. 

Albermarle

I am unsure if I will make over the £1000 tax return exemption, 

I think ( but not 100% sure) that the £1000 relates to turnover, not profit.
Presumably you will achieve a £1000 turnover.

soolin

Albermarle said:

I am unsure if I will make over the £1000 tax return exemption, 

I think ( but not 100% sure) that the £1000 relates to turnover, not profit.
Presumably you will achieve a £1000 turnover.

You are correct, registration is required once turnover reaches £1000.

JibberdyDacodo

soolin said:

Albermarle said:

I am unsure if I will make over the £1000 tax return exemption, 

I think ( but not 100% sure) that the £1000 relates to turnover, not profit.
Presumably you will achieve a £1000 turnover.

You are correct, registration is required once turnover reaches £1000.

Where is the legislation for this requirement?

Marcon

JibberdyDacodo said:

soolin said:

Albermarle said:

I am unsure if I will make over the £1000 tax return exemption, 

I think ( but not 100% sure) that the £1000 relates to turnover, not profit.
Presumably you will achieve a £1000 turnover.

You are correct, registration is required once turnover reaches £1000.

Where is the legislation for this requirement?

gov.uk is often a good starting point for this sort of question. See https://www.gov.uk/become-sole-trader/register-sole-trader

JibberdyDacodo

Marcon said:

JibberdyDacodo said:

soolin said:

Albermarle said:

I am unsure if I will make over the £1000 tax return exemption, 

I think ( but not 100% sure) that the £1000 relates to turnover, not profit.
Presumably you will achieve a £1000 turnover.

You are correct, registration is required once turnover reaches £1000.

Where is the legislation for this requirement?

gov.uk is often a good starting point for this sort of question. See https://www.gov.uk/become-sole-trader/register-sole-trader

Thank you.

As I suspected, it is what HMRC (perhaps) want the law to say - as of today there is NO statutory requirement to register just because one has a turnover greater than £1,000.

ANGELFLOWER

Thanks for your replies. I would be selling to raise money for the charity, with information about the charity on the stall, but the money would have to go through my bank and then sent to them, as no member of the actual charity would be there. Think this would probably make me a sole trader. I will have to ask the charity if others do this and how it works.

poseidon1

JibberdyDacodo said:

Marcon said:

JibberdyDacodo said:

soolin said:

Albermarle said:

I am unsure if I will make over the £1000 tax return exemption, 

I think ( but not 100% sure) that the £1000 relates to turnover, not profit.
Presumably you will achieve a £1000 turnover.

You are correct, registration is required once turnover reaches £1000.

Where is the legislation for this requirement?

gov.uk is often a good starting point for this sort of question. See https://www.gov.uk/become-sole-trader/register-sole-trader

Thank you.

As I suspected, it is what HMRC (perhaps) want the law to say - as of today there is NO statutory requirement to register just because one has a turnover greater than £1,000.

No not what HMRC want the law to say, but what parliament  specifically  decreed and enacted 8 years ago via  s783 Finance  (No 2) Act 2017  amending   ITOTTIA 2005 - 

https://library.croneri.co.uk/cch_uk/btl/fno2a17-it-sch-3-pt-1