Folksy Ltd

HMRC New trading Allowance

I read in the Money Mail today that craftworkers can now earn up to a £1000 gross income a year in a start up business or a hobby above the £11,500 personal allowance without having to register for self -assessment. But if you go over £1000 you are liable for tax on all the profit including that £1000.

Paul

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Yes, I read about this last year in the budget. It’s great when you only earn a small amount from your craft each year. Still a good idea to keep records of purchases and sales though, just in case they want to check you out, and for your own peace of mind that you don’t go over the limit.
Kim

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Yes @KBCreations it is a good idea to keep account, if this applies to me then I shall still do my books every month.

I read that too, I wonder if they will stop sending me a self assessment form from next year?

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If you are already registered for self assessment then they will keep on sending you the form until you let them know that you no longer need it. If you phone up your local HMRC office and talk them through your situation they can advise on whether you need to be reistered and make the appropriate notes on their system if you can be removed. The self assessment form (the online version any way) also covers paying NI which is important for certain benefits (state pension for one).

even with my pension I am thousands and thousands below that threshold but accountant said that I still have to send in the self assessment forms…they must surely realise that reaching £10k is never going to be a reality…

I agree Kim ,its best just to record income and expenses just in case your sales go through the roof.
Brenda I have spoken to my accountant ( although I only pay him £140 he wasn’t too keen on me leaving him) and he is marking me down as retired, which i am really ,the last year of non- sales has made my mind up, so this new rule is a godsend really because I won’t exceed the £1000.
I am just wondering what the Folksy take on this is because I think being registered with HMRC is a pre-requisite for joining.

I thought I’d heard/read somewhere that this was aimed at people who do occasional car boot sales/ebay sales to get rid of old stuff they no longer had use for and not crafters/sellers who make regular sales/have a permanent sales ‘venue’ (online or otherwise) also worth noting is that the £1000 is takings not profit.

Here’s the link to the governments website

https://www.gov.uk/government/publications/income-tax-new-tax-allowance-for-property-and-trading-income/income-tax-new-tax-allowance-for-property-and-trading-income

And as @DeesDesigns says, it is income, not profit. :slight_smile: