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  • Taxing issues

    Hi all
    I have started getting some money in from my clock making hobby. As far as tax goes i am wondering which would be the best way to go.
    Do I
    a) declare any income to the tax man and have them just my tax code to a correct level.

    or
    b) register as a business and do my tax that way.

    At the moment my outlay for parts, packaging, business cards, website etc are much greater than any money i have got in, but of coarse i did expect an initial outlay as with any new venture.

    Dave
    Clocks that ROCK!!!
    Hand built clocks from unusual things
    facebook, twitter & Online. www.clocksthatrock.net

  • #2
    Hi, fellow Oxfordshire clever crafty person...
    The Tax man can be very helpful, with advice. Why not call them and explain that it is a hobby that you fully expect costs to be more than you make for sometime yet and ask them what to do. You can do this fairly anonymous if you wish, but I don't think its 100% necessary. I am no expert, but they probably will have a sceme or something specifially for hobby income.
    I am fully self employed as I have several income stream, Uncle Wiggy as a children's entertainer, I also sell conservatories, and my new venture of selling my art and printing services, so I have an accountant who watches my back.
    Next most accountants will offer free advice session, where they will be able to guide you, and will give you an idea of their costs. This will vary so get several or better still seek someone who can recommend one. (I am sure I can help if you pm me)
    Hope this helps you and or anyone reading this...
    Barry

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    • #3
      There are a lot of threads Re registering self employed, just use the arch facility at the top of the page.

      From the tax office's point of view when you start to sell regardless of the amount of profit you must register as self employed. Failure to advise them will result in fines, you used to have 3 months but think this has now changed to immediately. They can collect any tax due from your page but you still have to keep accounts and submit a tax return each year, along with buying public liability insurance again this is a must to protect your home etc from many claims, again loads of threads with suggestions as to who to approach for a quote.

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      • #4
        I would suggest product liability too.

        As a hobby business you will probably get some money back via your full time employment tax code. My friend did last year after her accountant worked through her hobby business accounts. An accountant will probably only charge you around £200 and probably 'save' you more than that.

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        • #5
          It is essential that you register with HMRC as soon as possible, I'm sure if you explain that you didn't realise you had to register they 'may' be understanding (although I can't say for definite). Your tax return works like this if you work elsewhere too - a) put in all your details from your P60 b) add in your self-employed income/expenses. Because I stopped working as an employee half way through a tax year I ended up getting a sizeable refund as a result of over-payment.

          I'm fairly certain that I shan't be in profit by the end of the next tax year - so I won't owe them any tax, although I have decided to still pay my national insurance (as I need to continue paying into that before receiving a state pension in a gazillion years time)
          Lucy Blossom
          Shop and blog: http://www.lucyblossomcrafts.co.uk
          https://www.facebook.com/LucyBlossomCrafts

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          • #6
            Yup - defintely just give them a ring. They are very helpful.

            You'll find some other useful info and handy links in this article on my website about starting out - scroll down for the sections on the legal side of things http://www.ejrbeads.co.uk/sellingjewellery.htm
            Emma
            www.ejrbeads.co.uk - unique art beads & more
            www.ejrbeads.co.uk/shop - beads, polymer clay, glitters and inks oh my
            www.facebook.com/EJRBeads - Like me at Facebook!

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            • #7
              Just noticed you have a website so you are running a business and need to ring the HMRC sooner rather than later as they trawl through the web looking for business. You also need to add a landline and address to your website to meet the DSR's, if you are using purely as a gallery and not taking sales from the site you may be better using a blog.

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              • #8
                I am just echoing what everyone else has already said register as self employed and make sure you have public and product liability insurance. You then have peace of mind.

                Comment


                • #9
                  Thankyou everyone for the helpful advice. it looks like i need to get on a few things now rather than later.

                  Thanks again guys
                  Dave
                  Clocks that ROCK!!!
                  Hand built clocks from unusual things
                  facebook, twitter & Online. www.clocksthatrock.net

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