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I dont make enough to pay tax but I reclaim it on my beads?

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  • I dont make enough to pay tax but I reclaim it on my beads?

    Im only a fair weather crafter I do some small fairs and have a website and enjoy it but I have another full time job too, my craft business doesn't make enough to pay tax does that mean I can't reclaim the tax from my stock purchases?
    Yours IW Inspired
    www.iwinspired.co.uk
    IwInspired on Facebook
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  • #2
    As far as I am aware you will pay tax on any profit you make as your full time job will take your tax allowance. I don't know if you can claim back from the tax you've paid on your job, but I'm interested to see as I'm just starting out in a similar position.
    Nici

    Website: http://www.goblindreams.co.uk
    Facebook: http://www.facebook.com/pages/Goblin-Dreams/33795458652
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    Blog:
    http://goblindreamer.Blogspot.com

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    • #3
      When you do your self employment tax return at the end of the year, all your beads and purchases will appear as expenses, your sales will be income and the balance will show either a profit or a loss. This is then merged with your figures from your full time job and you may end up having paid too much tax, in which case you may be due a refund.

      You can't get the tax back from purchases unless you are registered for VAT, which isn't necessary until your sales are over a certain amount (I think it is around £60K but may be wrong on this figure) but registration requires quite a bit of paperwork and certainly isn't worth it for small amounts.

      Make sure you have registered as self employed for your crafting business, even if you are also in full time employment as this is legally required to be done within 3 months of making your first craft sale.

      Have a look at the HMRC website for information on registration, etc. There is loads of information on there which should help.
      Ali x

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

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      • #4
        If you are in full time employment you can also get and excemption from paying the s/e nic stamp used to be the first £3K but you will have to double check this again, all details on the HMRC website.

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        • #5
          Do also check your contract of employment, as many companies do not allow you to do any other work, paid or unpaid.
          www.just-soaps.com
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          • #6
            Just to clarify what you can count as expenses. If you buy £2000 of materials and use £100 of this to make goods which you sell, your cost of sales is £100. If you then make a loss on your trading for the year, you should get a tax refund from your other job, via HMRC. The other £1900 is sitting as stock on your balance sheet, and does not count as an expense until the point at which you sell it.

            Cost of sales is defined as:

            Good and raw materials purchased in the year
            Plus stock on hand at the start of the year
            Minus stock on hand/work in progress, at the end of the year.
            Annie

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            • #7
              Yes, you still need to submit your self assessment form at the end of the year. Last year I was working as well as setting up my photography business and ended up getting money back from them :-)
              Sarahleigh

              www.sarahleighphotography.co.uk

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