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Turning a hobby into a business

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  • Turning a hobby into a business

    I am thinking about starting up a business born out of a hobby, I work part time, pay NI, Tax etc.
    Am I right in assuming I would have to register the project as a Business within 3 months, and if so, when would they consider the 3 months starting from?

    Do I have to register as a business to sell crafts even if I only make a few sales [if that] a month?

    Thanks
    Nikki
    Last edited by nikkijball; 02-08-2011, 09:45 AM. Reason: spelling error

  • #2
    Hi Nikki, welcome to the fourm.

    You will get a lot of info on this but to save you waiting try a search.

    There are links to information sheets, long threads with lots of detail and many questions that I would never have thought to ask, answered in full.

    Happy reading
    Do not watch this space

    Comment


    • #3
      The quick answer is yes - you need to register within 3 months of making your first sale, whether you are selling as a business or a hobbyist. It is irrelevant how many sales you make and whether you make a profit at the end of the year. If you are already working and paying tax, any losses made on your crafting business will be taken into account and you may end up with a tax rebate.

      Make sure you keep all your receipts as you will have expenses from before the time you start making sales - all these can be entered onto your end of year return. If in doubt, register straight away as it won't really make much of a difference at this time of year - the only time it can sometimes be worth hanging on is if it is coming to the end of the tax year and you may be able to register in the next year (saves one extra end of year return!)

      Good luck with your new venture and to the forum. As Stef has said, there are lots of threads worth searching for and reading through which cover this topic in great detail.
      Ali x

      Etsy Shop: aliscraftstudio.etsy.com
      Facebook: AlisCraftStudio
      Follow me on Twitter:
      @AlisCraftStudio

      Comment


      • #4
        Hi, welcome to the forum.

        As you work part time,do check your contract of employment to see if there any clauses re doing other work.

        You do have to register with Mr Taxman within 3 months of your first sale - he isn't bothered whether you make a profit or not.

        Any loss you make inthe first few years can be deducted from your tax liability from your paid job.

        Jane
        www.just-soaps.com
        Twitter JUSTSOAPS
        FB www.facebook.com/pages/Just-Soaps/258910018463
        Natural Handmade Olive Oil Soaps and Skincare free from SLS, Parabens, and other Nasties

        Comment


        • #5
          You actually no longer have the three month leeway. You should notify the tax office as soon as you offer something for sale.

          http://creativeandfaithful.blogspot....s-tax-and.html
          full time mum and very very part time crafter.

          Comment


          • #6
            Short answer, yes if you really want to get serious with starting this business. I mean, if you want just to try and sell a thing or two, you would not have to register but if you decide to go all out, you then have to register as the last thing you would want, is opening the door for the revenue blokes. I am pretty sure that would be no problem and at times, could even work to your advantage in the form of rebates and some other.

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            • #7
              I mean, if you want just to try and sell a thing or two, you would not have to register
              Actually the rules on the inland revenue state that if you offer items for sale you need to let them know.
              full time mum and very very part time crafter.

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              • #8
                I agree, I would not run my store without doing it the right way. Be careful not to get stung! If you sell you should declare it.

                Good luck
                www.beadhall.com for semi precious, pearls and glass beads
                Twitter - The Bead Hall Ltd

                Comment


                • #9
                  The good news is that HMRC realise it's difficult for people, so they run free workshops to help you understand what to do.

                  When you register with HMRC ask about the courses in your area, or look on their website.
                  Annie

                  Comment


                  • #10
                    The old adage you can never avoid two things in life, dying and paying taxes.
                    Always be on the right side of HMRC and you will always sleep easier.
                    And you will be able to claim against your business until it makes a profit

                    Comment


                    • #11
                      Good job I read this post - I thought the 3 month rule still applied. Better get on to HMRC in the morning!

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