Need a cite for tax (not site!)

[Hazer]

I'm really sorry to ask this, but I'm really frazzled and can't find it here or on the Inland Revenue site:

Can someone point me to where it cites on a government site about selling as a hobby, that you need to register for tax, and that you have three months from the start of selling to register. I thought I'd seen it on the Inland Revenue site, but now I can't see it, grr.

Thanks :)

[greannancrafts]

Selling is selling to Mr Taxman - whether you are a hobbyist or corporate.

http://www.hmrc.gov.uk/businesses/index.shtml

You should find some help there, or phone them, they are very helpful.

Jane

[Hazer]

Thanks, I'll have a look through. The reason I asked is that I wanted to show someone else the relevant excerpts about selling, and if it actually says that in effect, the moment you start to sell, you're considered a trader.

(I don't dispute that at all, I just want something in print to back me up, and didn't really want to ring up instead)

[Daesul]

They wouldn't mind you phoning, every time I've called they've been most helpful and maybe could point you in the right direction to find the item in print.

[Magenta5]

When I looked I found it really vague as to whether or not I was self employed! I didn't think I was and wanted to pay my tax on any income from selling jewellery through PAYE as 'other earnings'. I wrote them a letter setting it all out and they decided I was self employed. I couldn't be bothered to argue and filled in the tax returns and to be honest it's not that bad.
I'd give them a ring to set it all out but be prepared for them to say you are self employed as because as soon as you make any money they will want their cut! ( My first year I owed them 6p and they still wanted it :p )

[Hazer]

Thanks for all the suggestions - I'll try looking under self-employment. When it comes to arguing with someone though, there's nothing quote like showing them the proof in black and white (short of recording a phone call to the Inland Revenue, the website was the easiest way to do it...but I can't find it in writing!)

[AnnieAnna]

Hi Hazer,
this is accountants disscussing the subject. Don't be mislead by the £2000 thing. That was true in the past but was been bopped on the head a decade or more ago. http://www.taxationweb.co.uk/forum/is-it-a-hobby-or-self-employment-t10394.html

And here are some examples from the tax man himself that make it pretty clear (he even uses a crafter as an example :)) http://www.hmrc.gov.uk/guidance/selling/examples.htm

AnnieAnna

[Caroleecrafts]

Basically if you are buying materials to make items or just to sell on, then you are trading. Amounts do not come into the trading part, they only become relevant for things such as Class 2 NIC and off course your PA, if you are not working.

A lot of crafters are also employed be it all part time, they pay PAYE on their earnings but still submit tax returns annually. If you are currrently paying NIC through PAYE there is a threshold of about £4k (but check this) before you need to pay the class 2 as well, this is when the exemption certificate has to be applied for.

I always feel that it is better to be safe than sorry and register a business with the IR, that way you are covered. They have courses you can go on and are very helpful.

[the card shark]

If you are unlikely to be making a lot of money from your venture then you may be eligible for an exemption certificate for class 2 national insurance.

I had an exemption certificate when I was employed part time (earning about £11k per annum) and working as self-employed on an adhoc basis (was doing data entry - earnings ranged from £150 to £1600 p.a.).

I thoroughly recommend you give your local tax office a call. They were very helpful with me and of course you can always ask them to point you in the right direction concerning their website if you want to view the information yourself. :)

[Hazer]

AnnieAnna, thank you, that's brilliant, just what I needed!

Thanks everyone else for the advice too - I'll show it to my 'argument buddy' to show real crafters' experience :)

[AnnieAnna]

If you are an earth mother type with a really chequered career and are really short on your National Insurance contributions and worrying about how you will live on a quarter pension......can I recomend paying NI - the lowest contribution you can get away with.
12 years of self employment (and being credited in retrospect for being a stay at home mum) has topped up my pension to 85%. It hasn't half taken a weight off my mind. And if I keep going (pass me a zimmer frame....) I might actually make the whole pension.

And I just have to unburden myself of this: I have been saying how nice your local tax people are. I had one reduce me to tears the other day.
First phone call got a nice young man who couldn't sort my problem as my return hadn't worked it's way through the system so he said phone back at the end of the week. I did and got a different young man. He typed somthing in wrong and said I wasn't me and refused to talk to me.....or start again and check his typing...he was incredibly UNHELPFUL.
As I was all nervy about my question and had had to hang on for what seemed like half an hour before getting through to a human being, I just lost my composure and crumpled up in a heap on the kitchen floor weeping tears of frustration and rage.

I did some yogic breathing and thought I'd phone again, not sure what I'd do if I got the same man but luckily I got a girl. And she was great and sorted me out and the tax man owes me money. Hooray! Then she added "and I've got another 83 pence for you". Wow! I thought it was Xmas all over.

[Mrs T Riddiough]

My craft stall is a side line of my real hobby which is making stuff. I never thought of myself as a trader or in business. After reading this thread I think I'm going to have to get in touch with the tax office and find out exactly which paperwork I need to fill in.

Thanks for the advice.