Legal issues related to selling craft-work

[Les Symonds]

How are your 'legal  minds'? As a PAYE paying taxpayer in full time employment, if I start making and selling turned items at craft fairs, shows etc, do I need to be aware of issues such as registering as a business, informing the Inland Revenue etc? Any advice would be greatly appreciated.

[Philip Greenwood]

Hello

To start this off all the income need to be recorded like wise your expensesrs to. You need to inform your local tax office and they will give you lots of help, this shows to them that you want to get it right.
 
NI may need to be paid as well but the tax office will tell you.
 
You will have to look at insurance as well to cover you, and depending on what items you make and sell you may have to comply with safety for toys and if you sell any lamps this will come under electrics regs.

You will need to disply your name, address on your stand and if not trading under your own name you will have to check the name is not registered. Sorry, but yes a lot to think about. I know yreceivel recive lot of help from others on here.

Regards
Philip

[bodrighywood]

If you sell your work you need to register as at least a sole trader withing three months of your first sale. You don't need to submit your first set of earnings until you have completed a full financial year (April to April) Also, ideally, get PPI insurance (about (30+ a year). Most of the decent fairs will not accept you unless you can produce proof of it. Registering is easy and if you don't make a profit then it can be set against your main earnings and possibly give you a tax rebate. The fine for not doing so is pretty heavy and not worth the risk. It is a simple process and after doing the first one involves little more than a break down of your income and expenditure, easily done with as spreadsheet.

Pete

[Les Symonds]

That's great, thanks Phil and Pete....plenty there for me to think about.

Les (gwyntog)

[TONY MALIN]

As a one time beekeeper I sold many hundreds of pounds of honey. None of the income was ever declared to the tax people.
There was a case some years ago where a beekeeper was challenged by the Revenue. He successfully showed that he was not making a profit, in fact taking into account all his costs he was making a loss. The matter was dropped and I'm not aware of any subsequent case. ( no doubt somone will dispute this)
There is of course a distinction between an amateur who pursues it as a hobby, and a commercial man who does it for a living.
Even a commercial man is likely to need some other means of supplementing his income.

I think the same principles apply to selling craft.

Tony Malin

[bodrighywood]

Tony, I don't know if you are aware that the tax people regularly trawl crafting sites as they are clamping down on what they consider as tax dodgers. As various different taxes etc are a big issue at the moment perhaps those who haven't registered need to be careful what they say in what is essentially a public forum?
Incidentally there is a petition set up requesting that the government issue cards for those that have registered. It can be found here if anyone feels strongly enough about this to sign
http://epetitions.direct.gov.uk/petitions/42909]

Pete

[TONY MALIN]

Thanks. I see the petition relates to SELF EMPLOYED SOLE TRADERS. If you are self employed you need to abide by the relevant legislation, and it would be advisable to employ an accountant.

Tony Malin

[Woodcrafts]

Tony, I don't know if you are aware that the tax people regularly trawl crafting sites as they are clamping down on what they consider as tax dodgers. As various different taxes etc are a big issue at the moment perhaps those who haven't registered need to be careful what they say in what is essentially a public forum?
Incidentally there is a petition set up requesting that the government issue cards for those that have registered. It can be found here if anyone feels strongly enough about this to sign
http://epetitions.direct.gov.uk/petitions/42909]

Pete

I saw this post a few days ago and nearly replied in the same vein as Peter - this is an open forum and could be read by anyone. We actually have a VAT inspector in one of the club's where I demonstrate! He's been quite useful to me, but at the end of the day, he will do his job based on information, no matter where he got it, and tax evasion is top of his list.
Going back to this threads main topic, it does not matter if you have registered yourself as self-employed or not; if you are REGULARLY selling anything and making a profit, the taxman WILL be interested. In fact, if you are doing that but haven't declared it, you could be in worse trouble.
I don't know the case of the beekeeper referred to by Tony but he probably got away with it by showing his business was running at a loss, but he still had a 'business', and he would have needed business records, (sales, expenses, costs etc.) to be able to prove his situation.
I don't want to deter anyone from selling their work. It is very satisfying, but if you have any concerns speak to the Inland Revenue first. They are VERY helpful and not the ogres they are often perceived to be.
Hope that helps,

[Bryan Milham]

I like the card idea and have signed the petition.

I will also repost in the local Face Book Crafters areas I'm a member of.

[TONY MALIN]

I've tried to distinguish between a business/occupation and a hobby. The beekeeper in question was a school teacher.
Not many hobbies return a profit, but they can help to defray some of the expense. And of course beekeepers do an enormous amount of public good. Pollinating your fruit trees free of charge, for example.

I'm surprised the Tax people have staff to spare trying to catch tax dodgers at craft fairs.

I agree the less said on the subject the better.

TONY MALIN

[thebowlerhattedturner]

All of these posts ,including mine, have been pretty negative although true to the point. What should be remembered is if you enjoy turning and have the  ability to to turn out well crafted goods, if you do not wish to be a millionaire(or want a bottle of wine on Sundays)and welcome the challenges that being a self employed wood turner throws up, if you are happy for your hobby to become an all consuming lifestyle I cannot think of a better way of nearly earning a living.Be prepared though for the members of the public who pick up a finely crafted item that you have lovingly worked on that may have taken you a day to turn and a week to carve,burn,sand, polish or whatever only to hear them say"I did wood turning at school or I made one of these at school or it's only worth five quid or the favourite one was don't buy that it's stuff they've made themselves!"Sometimes it is hard to keep quiet and keep a civil tongue in your head, but the day that the customer tells you it is the "best they've ever seen or gosh this must have taken you ages or oh! it's beautiful" those days you are 6 foot taller and the world is a better place.
Regards
John BHT