Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • rickyroma
    • By rickyroma 12th Oct 19, 7:22 PM
    • 45Posts
    • 2Thanks
    rickyroma
    Small craft business sideline
    • #1
    • 12th Oct 19, 7:22 PM
    Small craft business sideline 12th Oct 19 at 7:22 PM
    Just want to be clear about future tax payments if I can so I can make sure how much tax I will soon have to pay!
    I have a full time job earning 23,000 pa. I also have a small craft business run from home where I will make about 6000 by April 2020.
    Am I correct in thinking that I only pay tax on anything above the first 1000 leaving me with 5000 liable for tax? After expenses the 5000 would be reduced to 4000 profit.
    Is it as simple as saying there will be 20% tax to pay on 4000 ?
    Sorry if these questions are very simple but I have never done anything like this before.
    And I fear this will be a stupid question , but , do I pay national insurance on my craft profits too or is that just something that is paid through my normal employment?
Page 1
    • Pennywise
    • By Pennywise 12th Oct 19, 8:03 PM
    • 12,161 Posts
    • 24,097 Thanks
    Pennywise
    • #2
    • 12th Oct 19, 8:03 PM
    • #2
    • 12th Oct 19, 8:03 PM
    You can't deduct your actual expenses AND the 1,000 trading allowance. It's one or the other, so you'd just deduct the larger amount. So your taxable profit would be 5000.

    Yes, at that level tax is 20% so 1,000 but be careful because if your profits are more and the tax is over 1,000 you also have to make payments on account so you could find yourself paying two years worth of tax in a single year.

    If profits rise to around 7k, you'll also have NIC to pay.
    • rickyroma
    • By rickyroma 12th Oct 19, 8:55 PM
    • 45 Posts
    • 2 Thanks
    rickyroma
    • #3
    • 12th Oct 19, 8:55 PM
    • #3
    • 12th Oct 19, 8:55 PM
    You can't deduct your actual expenses AND the 1,000 trading allowance. It's one or the other, so you'd just deduct the larger amount. So your taxable profit would be 5000.

    Yes, at that level tax is 20% so 1,000 but be careful because if your profits are more and the tax is over 1,000 you also have to make payments on account so you could find yourself paying two years worth of tax in a single year.

    If profits rise to around 7k, you'll also have NIC to pay.
    Originally posted by Pennywise
    Very useful. Thank you very much

    Regarding expenses.. would I be able to get away with claiming a mobile or home wifi contract is an expense as the craft business is conducted through Facebook and Instagram..or is that being too cheeky ?
    • Savvy_Sue
    • By Savvy_Sue 13th Oct 19, 9:11 PM
    • 40,162 Posts
    • 37,560 Thanks
    Savvy_Sue
    • #4
    • 13th Oct 19, 9:11 PM
    • #4
    • 13th Oct 19, 9:11 PM
    Very useful. Thank you very much

    Regarding expenses.. would I be able to get away with claiming a mobile or home wifi contract is an expense as the craft business is conducted through Facebook and Instagram..or is that being too cheeky ?
    Originally posted by rickyroma
    Unless you have completely separate contracts for business and for personal use, that's being too cheeky.
    Still knitting!
    Completed: TWO adult cardigans, 3 baby jumpers, 3 shawls, 1 sweat band, 3 pairs baby bootees, 2 sets of handwarmers, 1 Wise Man Knitivity figure + 1 sheep, 2 pairs socks, 3 balaclavas, multiple hats and poppies, 3 peony flowers, 4 butterflies ...
    Current projects: pink balaclava (for myself), seaman's hat, about to start another cardigan!
    • Pennywise
    • By Pennywise 14th Oct 19, 8:16 AM
    • 12,161 Posts
    • 24,097 Thanks
    Pennywise
    • #5
    • 14th Oct 19, 8:16 AM
    • #5
    • 14th Oct 19, 8:16 AM
    Very useful. Thank you very much

    Regarding expenses.. would I be able to get away with claiming a mobile or home wifi contract is an expense as the craft business is conducted through Facebook and Instagram..or is that being too cheeky ?
    Originally posted by rickyroma
    As a sole trader, you can claim the proportion of any "dual" expenses like phones and broadband. If, say, you use them 50% for business and 50% for personal, you can claim 50% of the total costs. You just have to be able to prove your percentages to HMRC if they challenge your figures which can be hard. Basically, the bigger your claim, the more likelihood of challenge and more difficult you'll find it to justify the claim. Most people would claim say 10/20% which is usually easier to justify and more likely to avoid challenge. But, as said above, if you're going to claim the 1,000 fixed allowance instead, you won't be claiming anything for phone/broadband on top of that.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

136Posts Today

1,952Users online

Martin's Twitter