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Rules for making soaps for charilty & gift giving

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  • Rules for making soaps for charilty & gift giving

    Hi all, i just wanted to check a few things before i started making some soap, i don't have a business yet( still practising my techniques but hope to start one within 12 months) and am making M&P as a hobby. I was going to donate some to the local church so they can raffle and make some to give as gifts. I have my safety assessment and my insurance, someone said i have to reg with trading standards because im making soap, is this right? and how do i do that?

    I know that there are new regulations coming into place, some kind of portal that we have to register our products, i am assuming that is to do with trading standards. I am just alittle concerned that ince i register will the tax man assume im making soap for profit then come after me? I am not in a position to class myself self employed yet and all that side of it scares the life out of me! hence why i am taking my time and trying to get as much info about rules and who i need to inform etc.

    Any advice about any of this would be great
    Liverpoollassi

  • #2
    Someone will be along about the TS part but re the registering with the HMRC, surely it would be in your interest to register that way you can offset the cost of the supplies against your tax bill, if you are on PAYE you put the cost of the materials through as charity donations then you can recoup a percentage of tax on the amount. Plus if you set up now you are ready when you want to take the full plunge, plus supposing someone gets a basket of your goodies in a raffle then approaches you (as you will have to label all soaps etc with your details and ingredients) to purchase more are you going to say no? then you have the dilemma of not being able to sell.

    HMRC registering is not scary just a case of keeping good clear and concise records, which you can do on a spread sheet and filing a return once a year, taken details of your paye off your P60. HMRC also run courses and would have thought better to register otherwise they may feel you are hiding behind a charity to avoid tax and nic, when in fact you could be losing money.

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    • #3
      Thanks for that info, ii just worry about having to immediately start paying NI/Tax , been so long since i worked ( 10 years) as i care for my disabled son so i have to budget my money already. Scares me to think i may have this big bill to pay at the end of the tax year!

      Do you immediatly start paying NI/tax? or is that when you do your self assesment? sorry a million questions lol
      Liverpoollassi

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      • #4
        You can apply for nic exemption which as you are not working should not be a problem, that way you only pay when you reach a certain limit for 2012/13 £5,595. Plus you can earn up to your personal allowance without paying tax again for this last year
        £8,105.

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        • #5
          If you are only donating, not advertising and not selling, then it classes as a hobby.

          The minute you start advertising for work (even if you're not making any income) then you are self-employed and must register with HMRC (which is great cos you can then offset the cost of all your equipment etc. against tax). If you're going to turn into a business later then it's well worth investigating now.

          There's some really friendly webinars and help sheets on the HMRC website which would help you to find out more about going self employed, should you need to go down that route.

          Not sure about trading standards, but I hope others will be able to advise.

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