To not do a self assessment for my hobby?

[Pullyers]

I have an expensive hobby that I put many hours into in my spare time. I get a few thousand a year from selling a few things but my all costs are significantly higher, it's a hobby I do for enjoyment not to make money. Do I need to do a self assessment? The thought of keeping every receipt and all the stress and hassle just sucks the joy out of what is simply a hobby. Can I just not do it? What happens if I don't do it? Fines... prison?!! Thanks in advance! Ps don't want to say what hobby is as quite niche.

A few thousand a year? Yes of course you need to.

If you’re earning then yes you have to.

I have a job, totally seperate to my hobby. I make zero profit from my hobby. I can recieve a few thousand from selling off some of the bits of projects that are surplass but thr costs involved are far far more, so I make big losses (I love my hobby, its not about making money)

So no, I earn zero from my hobby, to clarify.

It didn't matter if you have a job or that you don't earn from it. You are bringing in thousands a year, so you need to follow the rules just like the rest of us.

Ah ok. I'm not bringing in thousands though as it costs me triple in the first place! So obviously I have no tax to pay. Just seems such as a hassle and waste of time to fill out a self assessment when I make substantial losses from my hobby so I don't need to pay any tax, what a huge waste of time. Oh well, if it has to be done.

You do earn from it but your costs outweigh this so you didn’t not make a profit. You should have been complete a tax return since you started. I’d give hmrc a call - they are really helpful over the phone

You are making money even if you make a net loss after expenses. You still need to do a self assessment.

Actually... what country are you in? In the UK you no longer have to declare anything under £1,000. I’ll try and find a link...

www.gov.uk/check-if-you-need-tax-return

Thanks, yes UK.

It's really irritating as, for example, I may buy something for my hobby which costs £2000. I use part of it and sell rest I don't nees for say £200. Rinse and repeat. As you can see by the end of the year I have spent a lot of money, far far more than the surplass I sell, which in turn just goes towards the next thing. Totally understand the point it it was the other way round as have no qualms with paying tax, obviously! Just all seems so pointless and for nothing, why bother? Why do they even need it? Madness.

This is a good explanation: www.google.co.uk/amp/s/www.mileiq.com/en-gb/blog/hobby-income-business-tax-purposes/amp/

If you’re making a loss and can prove it then can you claim tax back?

But I will be doing it as seems it's neccessary.

That's why I'm saying it's pointless, I never pay tax in the first place as there is nothing to pay, I wouldn't even need to claim it back!

Thanks Milo2

You register as self-employed. That’s easy. Then at the end of your tax year you log in, they ask you did you earn over £1,000. If the answer is no you tick the box then it says no need to fill out a tax return. Many people don’t know about this as it only came in in 2017 I think.

Thanks! By earn do they mean profit or turnover? I prob would be over 1000 coming in but prob at least 6000 going out so haven't earnt anything I've lost 5k...

Also you can’t claim for the stuff that you use for personal hobby use eg if you buy material and make something then sell the left overs, you can only use the actual cost of the part you sold, not the cost of all the material

It’s gross income of 1000

Thanks

Yes you need to complete a tax return

You need to record the sales and the actual cost of that sale - ignoring any part of it that you used personally

So you buy something for £2000, you use part of it personally, you sell the rest on for £200

Say you work out the cost of the part you sold on was £100, then you would have made £100 profit

I am no specialist on tax matters by any means but I did used to run my own papers crafts business.
The following is my understanding.

Imaginary scenario 1.

You purchase 100 yards of fabric.
You make 20 dresses using 3 metres per dress.
You have 40 metres of fabric left over.
You sell the dresses.
If you sold the dresses and the left over fabric.
That's a business and requires self assessment.

Imaginary scenario 2.

You purchase 100 yards of fabric.
You make 20 dresses using 3 metres per dress.
You have 40 metres of fabric left over.
You keep the dresses or give them away to friends/family.
You sell off the 40 metres of left over fabric.
That's a personal hobby, not a business and the sale of the left over fabric is just you selling a second hand possession, hence no self assessment.

Imaginary scenario 3.
Imaginary scenario 1.

You purchase 100 yards of fabric.
You make 1 dresse.
You have 97 metres of fabric.
You sell any of the fabric.
That's a business and requires self assessment because HMRC are never going to believe you purchased 100 metres to make one dress.

Pardon the extraneous "Imaginary scenario 1." towards the end. Copy and paste error.