Selling for charity

JibberdyDacodo

poseidon1 said:

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

Thank you.

I am not sure what exactly you are referring to, as I have not found a requirement for a tax return where turnover exceeds £1,000.

soolin

JibberdyDacodo said:

poseidon1 said:

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

Thank you.

I am not sure what exactly you are referring to, as I have not found a requirement for a tax return where turnover exceeds £1,000.

Look again on HMRC, the requirement for businesses to declare turnover of more than £1000 in a  year has been in force for some time ,business sellers have always had to declare their income for tax purposes, I'm not sure why you thought business sales were exempt from tax? 

 .The reason this has become so prominently discussed now is that online sites now return details of all online sales and the sellers NI numbers regardless of whether they are private or business sellers, with private sellers still exempt from tax as they have always been.

Just some helpful links for you, explaining that business sellers need to declare, and also if you follow links, the £1000 trading allowance is in there as well.There is also a tax board here on MSE if you require assistance with anything specific, and a thread about the trading allowance here on MSE on the ebay board.

HMRC

Online selling tax rules and key information if you sell on the side

Earned more than £1,000 on top of your main job in the last tax year?

If it’s from making or buying things to sell for a profit, as well as any other side hustles, you’ll need to tell us. The tax year runs from 6 April to 5 April.

This is the amount you earn before factoring in expenses. It is not the same as profit.

You may have to pay tax on money you made from side hustles if your total income, including your main job, was above the basic personal allowance of £12,570.

Check if you need to tell HMRC about additional income - GOV.UK

this link particularly mentions selling at car boot sales and fairs

Check if you need to tell HMRC about income that’s not from your employer, or not already included in your Self Assessment if you work for yourself.

This may include money you earn from things like:

• selling things, for example at car boot sales or auctions, or online

Grumpy_chap

JibberdyDacodo said:

poseidon1 said:

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

Thank you.

I am not sure what exactly you are referring to, as I have not found a requirement for a tax return where turnover exceeds £1,000.

That link which you apparently read includes the following:

783AD  The individualʼs trading allowance

783AD(1)  For the purposes of this Chapter, an individualʼs trading allowance for a tax year is £1,000.

And

783AE(1)  An individual qualifies for full relief for a tax year if–

(a)the individual has relevant income for the tax year,

(b)the relevant income does not exceed the individualʼs trading allowance for the tax year, and

(c)no election by the individual under section 783AL has effect for the tax year (election for full relief not to be given).

poseidon1

Grumpy_chap said:

JibberdyDacodo said:

poseidon1 said:

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

Thank you.

I am not sure what exactly you are referring to, as I have not found a requirement for a tax return where turnover exceeds £1,000.

That link which you apparently read includes the following:

783AD  The individualʼs trading allowance

783AD(1)  For the purposes of this Chapter, an individualʼs trading allowance for a tax year is £1,000.

And

783AE(1)  An individual qualifies for full relief for a tax year if–

(a)the individual has relevant income for the tax year,

(b)the relevant income does not exceed the individualʼs trading allowance for the tax year, and

(c)no election by the individual under section 783AL has effect for the tax year (election for full relief not to be given).

I suspect the questioner made no effort to read the statutory references or could not comprehend them.

Either way the fact that s783 does not make specific reference to trading income above the trading allowance  requiring self assessment declaration, may mean the questioner ( if no one else) remains skeptical. You can take a horse to water........

eskbanker

Surely this is a point that's come up previously on here, i.e. the distinction between HMRC asserting that something is necessary versus legislation actually mandating it, in that the latter can state that tax is payable but without defining the mechanism for declaration and collection?  It's a pedantic point though....

mybestattempt

eskbanker said:

Surely this is a point that's come up previously on here, i.e. the distinction between HMRC asserting that something is necessary versus legislation actually mandating it, in that the latter can state that tax is payable but without defining the mechanism for declaration and collection?  It's a pedantic point though....

My analysis of the underpinning legislation is:

The legislation determining the trading allowance doesn't make any reference to the actual requirement/obligation to make a self assessment return.

The starting point is that a self employed person must notify HMRC when they begin self employment in accordance with National Insurance legislation:

https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim70500

On receiving that notification (normally on form CWF1), by process, a self assessment record will be created.

HMRC will then in due course notify the person of their requirement to file self assessment tax returns under Section 8 of the Taxes Management Act (TMA) 1970.

On completion of the self employment pages of that return the person will need to declare turnover, make any trading allowance claim and thus taxable profit etc so liability for both income tax and Class 2 (and Class 4) NICs can be established.

The person can ask HMRC to withdraw the Section 8 TMA 1970 notice to file a self assessment return on the basis that there is no liability to income tax and NICs for the tax year involved.


Where notification under Section 8 TMA 1970 has not been given (or has been withdrawn) then Section 7 TMA 1970 requires the person to notify HMRC of chargeability.

HMRC can impose penalties for failing to file a return (even if there is no tax due) and failure to notify chargeability.

sheramber

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.

But poppies are being offered by a registered charity.

You are not a registered charity nor recognised by the charity as a seller of their goods. 

You are no different to somebody who donates part of their salary to a charity. 

If your income from ALL sources reaches a taxable level then you are liable to pay tax. 

If such income is less than your personal allowance then you will not have a tax bill. 

sheramber

Registering once turnover is £1000 is a concession from HMRC.

For many years you had to report ALL self employed  turnover  with no minimum amount. 

It also applies to property income. 

The ability to claim £1000 expenses  instead of actual expenses  means any turnover up to £1000 is covered by that expenses figure.