'Not for profit' side hustle - more hassle than hustle?

Sea_Shell

Morning everyone.

I (think I) understand the tax rules around side hustles, with the limits on selling items (30) before having to make a tax return, and TF allowances of £1000 turnover etc.

However, what about the other stuff, Insurance, liability etc etc. Does this make it not worth the bother.

If I decided to try and sell a few things i've made (knitwear), but only to cover the cost of the materials (no profit), do I still leave myself open to claims, or other issues?

Do I have to notify insurers of this "selling from home", and will they treat it as such, or can it all just come under the umbrella of a hobby.

So far, I've only just done bits to donate to charity, or for a tombola etc. No cash directly to me.

It would only be locally, cash on collection. So no need of a bank account etc.

Am I overthinking this, or is it just not worth the hassle of involving any cash changing hands.

I sell a few things on FBMarketplace already, but they are our things (clearout), NOT anything that I have made.

I'm assuming there is a 'not so subtle' difference?

Marcon

https://forums.moneysavingexpert.com/discussion/6661853/039-not-for-profit-039-side-hustle-more-hassle-than-hustle

I think you've probably not read this, which would answer most of the questions you've asked: https://www.moneysavingexpert.com/news/2025/03/self-assessment-side-hustle/

I don't think this it the board where you'll get the most helpful answers so have asked for this to be moved if there's a better one.

soolin

https://forums.moneysavingexpert.com/discussion/6661853/039-not-for-profit-039-side-hustle-more-hassle-than-hustle

As above there are some really good resources available. The 30 item limit is nothing to do with tax, just online sites reporting income, regardless of whether you are trading or not , there’s also the £1000 turnover reporting limit as well.

However the reporting limits are nothing to do with tax payable, absolutely nothing has changed there. Once you reach the £1000 turnover you need to submit a self assessment tax return, you can opt for cash basis accounts which is basically all income, less all expenses giving a taxable net income. If your turnover and expenses are low you do t even have to submit seperate expenses, just take the £1000 off the gross income and that leaves a net taxable amount.

Sea_Shell

It's not really about the tax implications.

I'm talking maybe a dozen items per year, for max £10, but probably £2-3.

More other stuff like potential liability etc.

Sea_Shell

I didn't even know this board existed!!

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/6661853/039-not-for-profit-039-side-hustle-more-hassle-than-hustle

If you are making something with the intent of selling it then you are a business. NFT or FT makes no legal difference to your liability and in principle if someone were injured by your goods you could potentially be liable for it.

Similarly were your Home insurers to find out and you havent declared the business then you would give them grounds to void the policy and avoid any claim irrespective if its related. Had a home claim from a major fire a few years ago, on inspecting the burnt out wreck of the home the spare bedroom was found to be full of bottles of shampoo and conditioner etc. Turned out they ran a hair salon and had been using their spare bedroom as storage of products they sold. Over a £0.5m claim declined as they had declared the only business use was clerical.

If it's worth it -v- giving the items away? Only you can really answer that. Clearly if you are making the goods for small kids with buttons and other things that could be a choking hazard your risks are more than if you are only making scarfs for adults.

Sea_Shell

https://forums.moneysavingexpert.com/discussion/comment/81942857#Comment_81942857

This is exactly the sort of thing that I was thinking about.

I don't "need" to recoup my costs, so will probably just carry on doing things for free, gifts or for charity.

Would home insurance exclude hobby gifting if no cash changing hands.

MyRealNameToo

Giving stuff away isnt a business so wouldnt be declarable unless you found a strange insurer that asks about your hobbies (never seen one yet)

The general rule of insurance is to answer the questions fully and completely and dont try to interpret/ second guess what they are getting at. Insurers for consumers (which Home is even if its got some business) is governed by CIDRA which says they must ask all the relevant Qs they can't rely on you volunteering information and they cannot ask a very vague question (eg "anything else relevant to tell us?").

People mainly get unstuck when they decide "have you seen a doctor/nurse/ PA, taking any medications or suffered any symptoms in the last 12 months?" can't possibly mean that they need to declare their trip to A&E for concussion last year so they answer "no"

Sea_Shell

I've been reading about the "Random acts of kindness" movement, whereby small yarn gifts are left anonymously for people (children) to find.

Can't help but feel that, knowing my luck, I'd be charged with littering!!

Is this classed as littering?

What about postbox toppers?

dinosaur66

if it is as you say just a few items all sold in cash locally do not worry about it and do not report it to hmrc

gig economy in uk is billions and billions

as for insurance its just a hobby in your case

i bet 95% of the traders on ebay/marketplace/vinted who sell £20k plus a year do not have specific home insurance that covers there hobby ?

i see sellers on ebay selling private who sell more than i do as a business

as for home insurance when i have been on meerkats type insurances looking for home insurance that covers ebay /market stock you cannot find a section to fill in that covers it it you have to use a specialist broker

i was a street market trader 6 days a week in london and essex for over 40 years / in the 1980s and 1990s the tax man used to raid markets every 2 to 3 months backed up by loads of police / and hmrc would call you into there offices for random taped sit down interviews / but now i see whole markets full to the brim and only thing that is not fake /counterfeit is the carrots from the fruit and veg men and not a tax man ever ventured near in 30 years

the rent on these markets starts from £115 a day for a small stall £200 plus for a 20 by 20 stall so they will be pulling in £800 to £3k a day each

despite what others might say on here that you must comply with every rule in the real world just enjoy your hobby and do not worry about the taxman for the sake of your very small beneficial kind hobby

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81944010#Comment_81944010

Will you personally replace all their possessions and their home if they follow your advice and find their home insurance void?

No? Probably says everything anyone needs to know.

Yes, many people dont and most get away with it. Same goes for shop lifting and tax evasion. But some do get caught and for them the losses can be devastating, per the example of someone losing more than £500k from not declaring they were storing products at home.