AWGB Woodturning Forum
General Category => Tool tips & reviews => Topic started by: Petworth on August 16, 2018, 06:11:30 PM
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Hello! I've been getting into turning and made some cool things from it, and was wondering - should I be paying tax on money I get from selling stuff I've made? I ask here hoping someone's been in the same situation and has an answer! :) I've been using this tax calculator (https://www.after-tax.co.uk/) to figure out what I'd pay, and while it isn't very much at all it'd be nice to know if I have to or not. Also saves HMRC getting antsy at my undeclared income!!
Cheers :)
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If you are selling work then ypou should be registered as a sole trader and submit am annual tax return.This can be done online.If you are still earning a wage then this can result in you getting tax rebates or, if you are amazingly successful selling, having to pay tax. It means that you can claim for anything that relates to the 'work'such as tools, wood and other materials, etc. Be aware that if you do shows, even the church hall varieties tax inspectors can and do turn up at them to check that you are in fact registered.
I keep a running spreadsheet throughout the year of my income and outgoings which is sent in with the online tax return and that suffices or at least has for the past ten years.
I have heard that you don't need to register if your net income is less than £1000 but I would check this if I were you.
Pete
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I have heard that you don't need to register if your net income is less than £1000 but I would check this if I were you.
This is correct. :)
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As Pete said keep a spreadsheet of all your sales and all your expenses. This includes cost of shows, mileage when using your car for you woodturning work. You will also be able to claim your running costs of your workshop. Your insurance. In fact anything to do with your woodturning should go down as an expense. This could include taking a lesson or going to a woodturning show.
Your soon be making a lost ;D ;D ;D
Ed
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Petworth it is obvious that you are an honest person or you would not have asked the question. And I know this is raking over old coals for many of the members here but if you sell your work and do not declare it for tax purposes you are doing the professional turners a disservice. If the taxman thought that all woodturners avoided paying tax on their sales we would be in great trouble. Honesty is the best policy.
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This includes cost of shows, mileage when using your car for you woodturning work.
You need business insurance on your car. You'll also need public liability if you're doing craft fairs etc.
Oh, and you'll need to organise business waste collection - you can get hefty fines for using your household bins for business waste.
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You should have pubic liablilty any way if you are doing shows. Decent organisers won't accept you without it. Not expensive anyway, I pay under £50 a year for £5m coverage includes coverage for demonstrating, tuition etc as well. Also doing shows you should have any electrics such as lights, extensions etc pat tested. You don't ned business insurance on your car unles you are claiming it as company vehicle. You can claim mileage to and from shows in any vehicle. Business waste depends on wether you are registered as a limited company or a sole trader I have been informed and if I take it to the local recycle place I usually get told to just chuck it in with the rest and to be honest most waste is shavings which you can get rid of for free via freecycle or some equivalent. Wonder how many of the 'hobby' crafters we would see at shows if they all adhered to the rules LOL.
Also just to put you off LOL. Don't sell t light holders or candle holders without non immflammable inserts and don't sell electric goods without a pat test on them, do be aware of using different woods and finishes for different purposes as some can be toxic. Always remember that if you sell something to someone you are ultimately responsible if harm comes to them irregardless of whether they are misusing etc. 'This peanut butter may contain nuts syndrome' is alive and well.
Selling is far harder and more work than making.
Pete
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As I understand it from my Insurance Company, if you use your vehicle to travel for the Business and/or transport goods, i.e taking stock to a Gallery or Craft Fair then you require the relevant Business Use Insurance.
Richard
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As I understand it from my Insurance Company, if you use your vehicle to travel for the Business and/or transport goods, i.e taking stock to a Gallery or Craft Fair then you require the relevant Business Use Insurance.
Richard
Maybe it has changed. I'll check on that. My initial guidance from the insurance company was that it only applied of I had registered the vehicle as a business asset which I haven't, it is registered as a private vehicle..
Pete
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You don't ned business insurance on your car unles you are claiming it as company vehicle.
No, you need business cover if you ever use the car for business purposes. So anything you'd claim mileage on will obviously count as business use.
It's no major expense anyway, maybe another £30 or less a year in my experience.
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You don't ned business insurance on your car unles you are claiming it as company vehicle.
No, you need business cover if you ever use the car for business purposes. So anything you'd claim mileage on will obviously count as business use.
It's no major expense anyway, maybe another £30 or less a year in my experience.
And presumably you could claim all (or at least a proportion) of the cost of the business insurance as a legitimate business expense.
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Not exactly, if you claim a mileage rate [45p/mile] then this covers Fuel, Tax, Insurance, Wear and Tare, Maintenance, Parking etc etc.
Richard
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Don't forget products liability insurance too.
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Once you start to try to claim expenses against any income, it's very important to get some professional advice from either HMRC or an accountant on what you can actually legitimately claim.
Taking advice for anonymous names on an internet forum is potentially very risky.
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Once you start to try to claim expenses against any income, it's very important to get some professional advice from either HMRC or an accountant on what you can actually legitimately claim.
Taking advice for anonymous names on an internet forum is potentially very risky.
I agree but also, based on info I am reading here ro car insurance, check periodically as it seems to change quite a lot over time.
Pete
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based on info I am reading here ro car insurance, check periodically as it seems to change quite a lot over time.
That hasn't changed in the thirty years I've been having business cover for my car insurance policies.
The lowest form of insurance SDP (social, domestic and pleasure) will only cover you for commuting between home and your regular place of work. As soon as you start driving around to different places or carrying any sort of goods or tools, you need business class insurance, regardless of whether you're employed or self-employed.
If there's any doubt at all about what you need ensure you explain you circumstances to your insurer in detail. If you get caught with the wrong type of insurance you get prosecuted for driving with no insurance and that's a serious offence.
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If you get caught with the wrong type of insurance you get prosecuted for driving with no insurance and that's a serious offence.
Driving with no insurance results in an immediate seizure of your car, points on your license and a hefty fine on top of transportation and storage costs, plus a release fee. As APH says, the wrong insurance is the same as none in the eyes of the law. If your insurance company is [incorrectly] telling you that you don't need business insurance, talk to a different one.
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Been and checked my insurance and apparently ther are two kinds of 'business' insurance. Mine is valid and allows me to use my vehicke as a private vehicle and for transport relating to my business. The other one is if your vehicleis solely for business and registered a s abusiness vehicle. I am safe and legal as I am thank goodness you all had me getting concerned there for a bit. It is something to remember though and worth checking out. Thanks for the info.
Pete
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Been and checked my insurance and apparently ther are two kinds of 'business' insurance. Mine is valid and allows me to use my vehicke as a private vehicle and for transport relating to my business. The other one is if your vehicleis solely for business and registered a s abusiness vehicle. I am safe and legal as I am thank goodness you all had me getting concerned there for a bit. It is something to remember though and worth checking out. Thanks for the info.
Pete
Your insurance company will not be incorrectly telling you that.
Insurance varies from company to company. If they are telling you that, it will be because the insurance they sell you covers it, and they will be correct.
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Like anything to do with insurance it is all to do with risk. So some will include business cover as part of your policy (if you ask) without an additional premium. Others will want an additional premium and some may even decline.
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My policy is with a company that specialises in artist insurance so that it covers a lot of things that an ordinairy one wouldn't
Pete