I think it is important to note that this blog item refers not just to crafters, but to fair organisers. Anyone who doesn’t have experience of the sort of lack of quality control here has clearly never stood at a fair where it seems to be accepted that Usborne Books and Forever Living are hand-crafted items! Many of the so-called handmade items are in fact bought it and can be found everywhere else (this is shades of last year’s extended discussion of what constitutes hand-made and original!).
As far as tax and insurance are concerned, I obey the regulations on both. I have queried with HMRC whether they really need to know the extent of my business failures each year but the regulations are clear on this; if you regularly stand at events with the intention of selling items then you need to submit a return and declare to them that you are self-employed (whether you make a profit or loss makes no difference to this). If you do one fair a year to try it out you can add your profit to your tax return as a one-off. Until the regulations change we are stuck with this (I do a tax return every year anyway so I hope they have a good laugh when they see it).
Insurance is not wildly expensive; mine also covers me for online sales as long as they are under 20% of my turnover.
Are you insured for what you sell on Folksy?