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naive (and now scared) crafter seeks help!

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  • naive (and now scared) crafter seeks help!

    hey guys. i'm new to the forum and seemingly new to all this 'business' lark. i make cards, invitations, etc and have recently designed my own website and therefore i have a 'business name'.. i've not advertised it particularly, just word of mouth at my day job. after reading a few posts here though i'm beginning to think i'm getting into something i don't understand! at what point does it become a 'business'? i have no intention of giving up work or taking on large orders. i want to sell a few bits and pieces to fund my hobby and to give me a reason to do it (if i only made cards to send from me then my hobby wouldn't be justified).
    anyway, my point is that i have no idea about legal requirements on my website, i wouldn't know where to start with tax issues and if all this stuff is going to cost me money then i have to wonder if the time i have to spend on this hobby is worth the hassle attached? maybe i should stick to simply crafting for friends and family?
    thanks in advance for your advice!

  • #2
    Hi and

    Just briefly, if you're selling your cards then you really should register with the Inland Revenue - it won't cost you anything. You'll need to keep basic accounts (income and expenses) and you'll only pay tax if you make any money. As others will tell you you'll probably end up spending more on nice sparkly bits than you make so you could even end up with a tax refund.

    As for legal regs for your website, one thing you will need is contact details - an address and phone number.

    If you have any specific questions just ask...a lot of us have been where you are so will be happy to help
    Visit Natty Netty for a huge selection of Iris Folding supplies

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    • #3
      Hi Welcome to the forum

      It becomes a business when people start paying you for your goods or services, for which you have to declare to the tax man. Its only seems a hassle when starting up as it all seems frightening at first having your own business, it is simple enough to set up and there is plenty of support available should you need it. The thing you need to ask yourself is do you want to keep it as a hobby or start to earn money by selling online/craft fairs etc. You don't need to give up your job just because you have a craft business you can do both as do many people on this forum.

      Khaled

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      • #4
        Hello and
        MISI - http://www.misi.me.uk/store_info.php?user_id=741

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        • #5
          Hello &
          Sarah

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          • #6
            Hi,

            Some great advice already.

            This is the site I have my website with and there's loads of advice here about the legal bits you have to comply with for the site (things like address, etc.)

            You need to register with HMRC within 3 months of starting trading. You can also apply for a small earnings exemption if you expect your profit to be under a certain amount and this means you won't have to pay NI contributions but I'm not sure how it works when you have another job (am sure someone else will) - my other job is looking after an 18 month old

            Go for it! The accounting and stuff all falls into place - just keep all your receipts and details of what you've sold. Then put it all in a spreadsheet.
            http://www.craftynclothy.com

            http://www.folksy.com/shops/craftynclothy

            http://craftynclothy.blogspot.com/

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            • #7
              Hi welcome to the forum. like many of us I work full time but am also registered self employed for my jewellery. register with the man, relax and enjoy your craft.

              Just thought I'd add my 2 penny worth...

              Hils
              Handmade jewellery, to buy gifts or just to treat yourself visit my website, commissions welcome or join me on facebook for a chat

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              • #8
                That is such helpful advice, what I do doesn't seem important enough to warrant registering but I suppose it's easier in the long run...

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                • #9
                  when does a hobby become a bussiness is an age old question.
                  If your intending to just run as a hobby, then you dont have to do anything. Just keep a clear record of income and outgoings, a diary is good enough, if in the future you start to make profit then approach the Taxman and register as a business, explaining that you are turning your hobby into a serious venture.
                  They are a lot more relaxed about these things than they used to be

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                  • #10
                    Hello and to the forum. The tax bit is not that difficult and always good pointers from other members on here to help. If you do make a profit and are working they can collect any tax due from your PAYE the following year and as you will have little income the short version of the tax return would be suficient, just debit and credits plus details from your P60 at the year end of where you work.

                    We will always help you out just ask.

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                    • #11
                      Originally posted by urbtaf View Post
                      when does a hobby become a bussiness is an age old question.
                      If your intending to just run as a hobby, then you dont have to do anything. Just keep a clear record of income and outgoings, a diary is good enough, if in the future you start to make profit then approach the Taxman and register as a business, explaining that you are turning your hobby into a serious venture.
                      They are a lot more relaxed about these things than they used to be
                      I believe that they don't really care that much about anything up to about £1k profit a year - it's not worth the effort it'd take them to tax you on it, for the few quid they'd get. However, I'm NOT a tax consultant!
                      Last edited by Scorch; 23-03-2010, 03:11 PM.
                      Cheers,
                      Scorch

                      Scorch's Pyrography : www.scorchpyro.co.uk
                      Crafts on Flickr : http://www.flickr.com/photos/tanniso...7606138937826/

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                      • #12
                        thank you all

                        hey everyone, just wanna say thanks to all who replied to my post, some good advice that hasclarified the situation and everyone is so friendly! i feel far less scared now hehe

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                        • #13
                          Originally posted by Scorch View Post
                          That's what I do, too - I just don't make enough money doing pyro as a hobby for the taxman to really be interested. I believe that they don't really care that much about anything up to about £1k profit a year - it's not worth the effort it'd take them to tax you on it, for the few quid they'd get. However, I'm NOT a tax consultant!
                          (Also referring to the post which you quoted.)

                          That's what I've been doing, whilst wondering whether I ought to make a declaration. I reckon that time spent by both sides in processing a declaration would be better spent elsewhere.

                          Does anyone know of someone who's been jumped on by the taxman for making this assumption?
                          ElaineJ soap and other stuff
                          website
                          blog

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                          • #14
                            Hi and Just wanted to say that there is some really good advice on this thread. This is such a great forum with a wealth of advice and good old commen sense!
                            Pips
                            http://www.flickr.com/photos/pipsjewellery/

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                            • #15
                              I've just posted most of this on another thread, but here it is again ...

                              If you're selling your stuff, then you're a business - and that means you have to register with Inland Revenue within 3 months of beginning trading. This is the case whether you're trading with a big profit, small profit or at a loss - you still have to register.

                              All it really amounts to is that you'll have to keep basic profit & loss accounts (which you should be doing anyway) and fill in a tax return each year. You can do your tax return online and it'll only take half an hour or so if your records have been kept well!

                              It's SO little hassle to be registered but avoiding it could result in a fine!

                              If you're just making a small profit (below the personal allowance - think it's £5435?) and you don't earn money anywhere else (e.g. in a regular job), then you won't pay any tax on your profits. If you DO work elsewhere and your earnings are above the personal allowance level, then your craft business profit is also taxable - it might not work out as all that much extra tax that you have to pay, but not declaring it is tax evasion = bad!!

                              It can work the other way too - if you work another job as well, but make a loss in your craft business, you can usually offset it and get a tax rebate.

                              So, to summarise - REGISTER WITH INLAND REVENUE!! There's no reason not to - it's one quick form to fill out, then your self assessment each year. Easy peasy!
                              Carol

                              Resin jewellery, encaustic art paintings & gifts | Twitter!

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