Crackdown by IR on small craft businesses

Ema, that really surprises me. I’ve done an awful lot of craft fairs over the past couple of years and not once have I been asked to show proof that I’m registered as self-employed. Insurance, yes, but nothing else. You must do some very well-organised fairs!

Lol @ciesse well organised but sadly that doesn’t equate to well attended :slight_smile: There are so many organisers nowadays and the demand for craft fairs is getting higher so I think some some organisers have an umbrella insurance cover for all the participants included in the price but sadly there are plenty that organise fairs as a way of making alot of money easily and quickly.

I think a crackdown is a good thing because it always irritates me that people think the same rules don’t apply to all of us. I was offered my dream job of a day a week working in a craft shop last year, but within a few weeks it became apparent the owner was not going to employ me legally. All the money for classes there was cash only and didn’t go through the books, and I just did not want to be involved so had to leave. I’ve always found HMRC really helpful and have a certificate of low earnings so I’m exempt from NI contributions, it does mean I will have no pension at all though which is a massive worry for the future. If I do start earning I am going to make voluntary contributions as soon as I can.

I am completing my tax return at the moment, hope to complete it very soon and send it in. I had to phone IR twice, both times spoke to the same person, so he knew what I had just asked. He was very helpful and reassuring.
I am a pensioner and have made a small loss this year, which I am not suprised about because of family illness I have not been able to give my shop and items my full attention.

I think IR’s case is that if you make something to sell, whether at a profit or loss, you are trading and must complete a self assessment form. I know they do look at online selling, and I have wondered when I was asked if I could complete 50+ of my gift bags whether it was the IR asking. But I am not afraid of any investigation, I wouldn’t be able to sleep at night if I wasn’t above board on everything. Marg. x

Thanks, Lizzie. I’d forgotten about NI. Yes, I am registered for self employed NI, but as I’ve been on benefits for the last 2 1/2 years, they haven’t take my stamp, though I have been credited with it. Now that I’ve started a proper job, I’m not sure what happens to my NI. I should ring them as they’re not taking self employed contributions and my employer did not take any out of my first salary, either.

Thanks.

Liz
x

Emma, if you claim child benefit, then you are credited with your NI contribution for the full time that you are receiving child benefit. I have hardly worked at all over the past 25 years, but I recently had a pension forecast from HMRC and I have almost a full pension coming and I still have another 18 years to work until I retire at 66 (or is it 68 now?) - mind you, they’ll have put it back by the time I get there. I still have another 3 years of child benefit to go, too.

Liz
x

Thanks Liz, but sadly I don’t have children and I can only wish the government would credit my contributions for taking in various sheep etc in need of homes! :slight_smile:

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Ha ha Liz…I had kids and opted to pay the 7.5p stamp when I got married…I was told that until your children are 16 your stamps are paid for you…that might be the case NOW but sadly up until I think it was 1996 unless you TOLD them that you had children, then they didn’t pay for your contributions…(forget the case that you had child benefit and should KNOW)…so when I reached 60 , my pension was £1.08 a week…I nearly had a fit !!! (and YES, I did seek help from the pension’s office and CAB but nothing anyone could do ) I had always made and sold things and had an exemption certificate for low earnings…I had to borrow money to pay for some back stamps but couldn’t afford much, so my pension is still pathetic…
However, I DO count myself lucky, as (until I drop) I am able to make and sell, whereas a lot of people get bored and have no other way to add to their income. …I just keep painting and hopefully selling to help pay the bills…

Yep, registered too, I couldn’t sleep at night for the worry otherwise!

On another slightly different note, it’s also surprising to me how many people sell toys without CE marking them (having done the safety checks first).

I registered as self employed a long time ago, I actually got ‘caught’ by the IR when a workshop I ran appeared in the local paper. I had intended to register anyway but the letter i received gave me the nudge. I don’t do a tax return any more as my earnings are so low they didn’t think it was worth it. I have an exemption from extra nationl insurance too as I earn less than £3,000 ( ha much less) They are really friendly and helpful if you don’t try to get out of your obligations and are honest. If I sudenly start making money I shall let them know!

Me too, I promise myself every January that I’ll be more organised and fill in my accounts as I go but every year I’m sorting it all out at the last minute.

Just registered. At the moment I don’t earn anything and have sent a lot more on supplies than have sold, but at least I have good intentions…

Do they send or email a tax return, or do you have to print one off yourself?

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First you register your business and get your UTR - Unique Tax Reference number. Then you can register on HMRC’s website for your online self assessment. You will receive a code through the mail which you need use to complete your registration. Then you can do your taxes online.

They will send you a paper form too but it’s quite easy to do them online and HRMC will respond quicker. Online you can save the form and come back to it later so you can work on bits at a time. Make sure you save your changes.

Glad I saw this because I had told Tax Credits I am running a business and assumed that was all I needed to do. I have just registered and am about a week within the 3 month cut off, so thank god I did see this!

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Might just be worth adding here, if you worked full time and then changed to running your own business (my situation) my accountant was able to offset start up costs against my previous tax paid, and happily that resulted in a hefty refund for me in my first year.

Just something to bear in mind for those of us who gave up salaried jobs and set up new businesses.

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I’m registered and we use an accountant.

I’m sceptical of the people on facebook trying to validate themselves by keep saying ‘its a hobby’. It may well be a hobby but its a hobby you get paid for.

And as mentioned above, the amount of people selling toys with no CE certification.

And the amount of people selling handmade items and supplies on ebay without being registered as a business seller…

…and …rant over… :slight_smile:

I left my job to work on my business full time - I got a tax refund, checked with the accountant who said it was OK, bought stock with it, got a letter from tax people asking for it back saying it had been issued by mistake - accountant rang them up - I got to keep refund, phew!

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Hi everyone!

I’m so worried about this!!! I haven’t registered yet, I keep going to do it, but then I get scared that I’m going to put the wrong thing!

I work full time and get child benefits for my two girls (not a lot, my husband works too). Is that going to be affected?

I did two craft fairs just before Christmas (didn’t know about registering at that point) and made a whole load of nothing really, with the cost of the pitch involved. But I’ve broadened what I make (I knit scarves and crochet hats, gloves, ipad cases, keyrings, make sock kittens etc) so I’m really keen to get sorted with the fairs again, but I need to get public liability (again, didn’t know about that before) but when I start filling in the form I think, hmm, I need to register first.

ARGH!! Please help!! Don’t know where to start! Is registering without selling anything going to lose me a load of money? (I’m not thinking of going ahead not registering, but maybe not doing it…)

Thanks

Jenni

All it will mean is that any profit you make will need to be ‘added’ to the amount you earn from your job and this is what you you will be taxed on. You’ll need to fill in a self assessment form declaring what you earn in your job and also a separate section on what you earn as a self-employed crafter then the taxman will add the 2 together and tell you if you need to pay any extra tax. So if you sell nothing you don’t pay any extra to the taxman, I also think if you make a loss (i.e you pay out more in materials, stall fees etc. than you sell) then you can offset this against your earnings (but I’m not 100% certain on that so it would be best to check with someone more knowledgeable first)
Hope this makes sense :slight_smile:

yes you can. What you do for your folkyshop/trading bit is add up what you’ve earnt and then take off your cost of materials, paypal fee, folky fees and the amount it cost for your pitch/table at a craft fair. The figure will either be a profit or loss.

If it’s profit you might pay some tax if it’s a negative I doubt you have any tax to pay.

It’s a biggish form but you only fill in the bits that are relevant to your own situation.

You can do it on the paper form which you ask them to send you or you do it online.

All the best

Ley, I wish the IR would tell me that I don’t need to fill in forms any more…I am 67 and I rarely earn more than £1k profit per year…My accountant said that they might well send me a letter telling me that I no longer need to bother, but they will only do it in their own time, so I have to be patient…Perhaps they have looked at my paintings and reckoned that they are so brilliant, I might get thousands for them???..ha ha

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