to wonder how many Facebook 'businesses' aren't registered with HMRC?

[Mimstar]

Two that I know of, one who boasts about being a business woman - are completely open about the fact that they aren't registered as they 'wouldn't earn enough to pay tax anyway'. That's how it works - is it? National Insurance, for a start.

I am a self employed marketing consultant and copywriter - and it really riles me to see these people setting up a Facebook page (selling dummy clips or 'candy'), painting themselves as the new Alan Sugar and then not declaring it!

I am not sure why it riles me so much to be honest, maybe I feel as though it makes a mockery of genuinely self employed people? Maybe it feels like they are taking the piss! During my first year of being self employed, I didn't earn enough to pay tax but I still declared it and paid my NI!

YNBU OP it riles me too. As another Poster said re Tax Avoidance and Evasion, the Big Companies are acting within the Law regardless, annoyingly. I doubt the Cake Businesses and the like are registering their Company, Declaring their Business and applying for the relevant Food Safety Certificates or whatever else they need.
Re the Dummies and Clips etc, I once had a Market Trader tell me how the Facebook Pages don't use a special glue she has to use for them, something to do with EU Law, don't know how true it is but it got me thinking.

I have a feeling HMRC are probably already all over these 'Businesses' anyway ~

YABU Mim. Like you, I'm a self employed copywriter and I am registered but don't give a shiny shite about these home based crafters. Most of them are Mothers making a few much needed pounds on the side which is what Mothers have always done in one way or another.

My Mum used to knit things and our neighbour did dressmaking...so my party frocks always came from her and my Mum and others would pay her...this was the 70s. I don't resent people for using their creativity to make a bit of cash.

It's not like they're raking it in ffs.

We're all just trying to earn enough to support their families. No excuse for breaking the law.

I find it interesting that working all hours in a low paid job because it's the only job you can get and legally claiming tax Credits makes you lazy, irresponsible scum. Yet at the same time playing at being a business person while illegally not declaring to HMRC and possibly breaking health and safety or food hygiene laws also makes you responsible and admirable.

The thing about not being registered is that it holds you back. I need to advertise, tender for jobs (however small, £££ not ££££££), go to conferences, have contracts with other businesses who are going to declare my business in their accounts.
If I do all that and 'grow my business' then sooner or later HMRC will want to know what's going on. Commerce isn't anonymous, there's a trail! Unless you are fannying about with word-of-mouth, cash-in-hand jobs, I suppose.

oh my fb feed is clogged up with friends selling their hideous home made tat

yawn

i doubt anyone on mine actually makes any money from it anyway :o

I dont use eBay business anymore I ordered an outfit for my dd's christening from little chic boutique big mistake. I paid via google checkout and they didn't hear anything for weeks emailed them and was ignored wrote on their wall to ask and my posts got immediately removed by the company.
I then wrote a complaint on their fb page it got deleted within about 3 minutes and they then blocked me.

I messaged from my dh's fb account and told the company I was reporting them to HMRC unless they refunded my money within 5minutes the money was back in my account and my dh was blocked by them too.

I think fb isn't great for the con artist businesses as they can simply block you and you have no way of contacting them and as they're often not registered you have no way of getting money back / complaining.

Facebook businesses even!

I think I am the opposite. I do the very basic self assessment returns but haven't really worked out how to factor in costs like my web hosting fees - which were more than my freelance income last year yet I still paid £20 tax on my freelance income. My work is really occasional, a small sideline. financially it's not worth it but I enjoy it.

Surely it won't be too long before the powers that be at HMRC trawl through Facebook and home in on a few.....

I do crochet as a hobby and plan to sell some at some point. I've kept all my receipts for wool just in case. If I do sell anything though, I'll barely be covering my material costs and the 'business' will definitely make a loss. As I have another job, will this be offset against my allowance for that? Surely HMRC couldn't keep giving me rebates if the 'business' continued to lose money, despite the requirement for me to register.

I have no intention of running a profit making business. I'd be selling things to recoup some of the costs of materials so i can buy more yarn without DH whining about the price.

Two of my relatives are child-minding and both bringing in over £2k per month. Neither of them are paying tax. They say that they are registered but because they can offset their expenses they don't owe anything. I don't believe that for a moment.

I am a cleaner and I am registered. I also have all the insurance, including auto insurance for business. I have to compete against people who don't claim any income or have insurance.

I have to compete against people who don't claim any income or have insurance.

This is my main bugbear - I have to meet strict food safety requirements and have certain training, yet the 'hobbyist' who is undercutting me isn't doing that and isn't insured, either.

What I don't understand is why people take the risk and buy from these businesses? I've seen some of the shoddy hygiene practices that these 'home bakers' practice - cats on the work surfaces, kids helping out with snotty noses - who wants to pay for a birthday cake that could make you ill?

Amothersplace - HMRC have actually got tools to analyse publicly available information on the Internet. They announced it a little while ago. So yeah, there is a chance that people who sell on the Internet and don't think anyone will know will be found out. Whether HMRC will have the capacity to deal with all the tat-sellers is another matter.

JollyHappyGiant - you can only offset losses if you run the business with the intention of making a profit. And if HMRC look into it and decide that was never your intention they will claw back the money - with penalties.

ChinaCupsandSaucers- not all home bakers work under such conditions. I work from home and my kitchen is registered with Environmental Health, I have my food hygiene certification (repeated every three years), am fully insured and pay my taxes. My kitchen operates under very hygienic conditions! All of my customers see my kitchen and know that I'm not allowed to have cats or dogs and that my children are banned from the kitchen whilst I'm working.

I have to say, I get very little business via Facebook. Most enquiries via Facebook seem to be from customers who do assume that you are a hobbyist who charges very little. I get most of my business from word of mouth followed by my website.

That's what I thought, riksti. I have no desire to act fraudulently!

But I surely do have to register if I'm selling things, even if I have no profit. It's just the offsetting part that's the issue.

Taz I know! Like you, my home kitchen is inspected and I'm insured, have HACCP etc. I supply my own tea room and others with the produce I make/bake.

That's my point. Why would someone choose to buy a cake for a significant event in their life from someone who has never had to prove they can do the job safely and hygienically? Why should you be competing with people who undercut you because they cut corners?

Totally agree ChinaCupsandSaucers. I saw one through a friends page (shared photos). Who charges between £500-600 pounds for a wedding cake and between £30 and £60 for a Birthday Cake. A lot I know are already taking Christmas Orders, I'm sorry but if you are that busy it's hardly likely you are only earning enough to get by/not doing very well.

The Ex and I used to run a cleaning Business many years ago, I let him fill in the forms once and he genuinely forgot to write one client down that we Invoiced, we got a small Bill from HMRC around a year later when said Client did their Tax. We contacted them apologised and it was all paid and sorted out. My point is there will always be a Paper Trail back to these 'Businesses' somewhere along the line ~

Sorry ChinacupsandSaucers I misunderstood (or maybe lost track of posts!)! I thought you operated from a shop and thought all home kitchens were an unhygienic mess!

I totally agree- I've even tried to be helpful and nicely told people (e.g. A friend of DH) what they need to do for certification etc and have just been ignored. Most of it is so straightforward I don't understand why they take the risk. On the Food and Hygiene course they don't let you leave for the day until you've passed the exam!

You should report them. Especially the ones who are bragging on FB yet lying to the CSA and HMRC.

Just mention they have a FB page the right people should look at.

So much for 'all in this together'...

I have an ex friend who has her own facebook page selling chocolate treats and little cakes out of her kitchen.

Whats laughable was i had to teach her how to make cakes and chocolate treats because she didn't have a clue how to bake at all.

And tbh the state of her house and kitchen there was no way she would have passed any inspection. I had to sit on my hands not to post on her page that i wouldn't buy from here as you didn't know what extras would come with it!

The Money Laundering Regulations 2003 allows HMRC ( which includes Customs or VAT man too ) access any bank account without due law process,this enables fast and quick detection for non declaration of either SE or LTD businesses ,as with everything in this climate of cut backs time is just a factor ,rest assured the fines are appropriate,the power of HMRC has risen for the last 10-13 years has grown considerably to allow loop holes and detection rates to climb,over the last 10 years I myself have been inspected 3 times and was fined £57.25 and that I think was just to justify the inspections.
My wife makes 'tat' ,however,we have found that after testing for durablillty her fabrications do last longer than a lot of high street 'tat' that most quadrupeds go out and buy,it seems that with everything consumer choice is exactly that ..choice !!

Tee I told the CSA that my ex was running a business, and that if they looked on facebook they'd find it, assuming that that was what I should do. The man told me that he couldn't investigate it, as its my exes job to inform them if he works

For those thinking that pin money they earn on top of their normal wages doesn't need to be declared because of the value - it DOES still need to be declared!

If you are paying tax in your normal job, then your pin money - however little it may be - is also taxable. The amount of tax you pay is based on your total income in each tax year.

And as has already been mentioned, if your self employed activities are temporarily loss-making (and surely no one plans to deliberately make a loss year after year, assuming they don't have a bottomless pit of cash to burn??!), you'd usually be entitled to a rebate on tax you've paid in your main employment.

If you plan to break-even with your self employed activities (e.g. selling only to cover your costs), then it won't affect your tax liability either way but you still have to inform HMRC that you are trading.

Registering as self employed takes minutes and it costs NOTHING. Then all you have is one annual self-assessment form to fill out, which you can do online and they'll do the calculations for you automatically. All you need to do is enter the figures from your P60 (if you are also employed) and your total income and allowable expenditure from your self employment.

You don't need fancy accounting software, just keep a note of incoming and outgoing costs on a spreadsheet, keep receipts etc. and have the total figures to hand when you complete your SA.

Simple. Why take the chance of being caught tax-evading?

Yes I agree its simple. Also means I got maternity allowance at the lower level but great nevertheless.