Do I have to pay income tax if I sell jewellery online?

[Songbird]

Hi, I want to sell my jewellery on folksy (or somewhere similar), but how does the tax thing work? I work full time at the mo, although it looks like my hours are going to be cut, so it won't be my main or only income. Realistically (but hopefully not ) it's going to be just a few pounds a month - do I have to pay income tax?

Thanks in advance.

Proberbly don't we have to pay tax on everything these days

No seriously i think it is if you earn over so much a year, not sure how much but if you don't earn alot then you don't have to decalre it.

I used to work at avon for a short while but got something stupid like 20 a month and someone scared me and told me to tell the tax man but my dh looked into it and said i never.

There are places to find out, try googling it :)

if you're making it to sell you'd deduct all your costs & overheads before working out the actual taxable income; but if you will still be earning enough to pay tax on your main salary, then legally you should declare & pay tax on all the jewellery income.

I won't tell though

You know if you work more then 16 hours a week at this then you can register as self employed and be eligible for working tax credits right?? If you're making them, organising them to be sold, sending them out, doing invoices & accounts then this will all add up hours wise.

Income tax is only payable on income over £6500 I think.Bear in mind that you are entitled to subtract the costs of equipment,tools,postage ect from whatever you earn.You do need to register with the Inland Revenue as self employed and if you earn more than £70 odd a week,pay NI as a self employed person.It is worth registering,is easy to do over the phone.All it takes is for one jealous competitor or 'friend' to ring the IR and inform against you,so I'd do it if I were you.

If you are s/e you have to fill in a tax return every year,but it is really easy to do-I hate forms but I find it a doddle.Good luck.

On the assumption that you are using all your personal allowance via PAYE on your job (and that you are earning over the personal allowance threshold) you will have to pay tax on any profits you make. That isn't the same as sales - that is selling price less the cost of making the items and running your business (selling costs, bank charges etc).

You should register your self employed work with the revenue and they will send you a tax return to complete which will cover all your income, your job and your jewellery making and any other income you have (savings etc). Actually you do it online these days but you won't have to pay immediately - you first tax return won't be due until the end of January next year. If you do start doing well and you start making real profit, it is worth putting a portion of it aside every month to make sure you don't have a big tax bill when it becomes payable in January or July. Hopefully that is a problem you might have sooner rather than later.

Good luck.

Thanks everyone. Niecie - yes, I am over my personal allowance threshold on my 'proper' job, that's what made me wonder. I didn't realise a tax return would have to include everything though.

My best friend's parents are retired tax peeps, so I might ask their advice. I'll make it clear I haven't sold anything yet - they might narc on me otherwise

Yes, you need to register as self-employed with HMRC. When I did it you had 3 months to do so.

I've always found the tax return ok. You can just have a simple spreadsheet with incomings and outgoings on to work out how much profit you've made.

I'm afraid your tax return does have to include everything so that they know how much you have earnt in total and how much tax you have paid so far. Don't worry about it too much as you can just take your PAYE figures off your P60 and your profit or loss from your jewellery making should be fairly easy to work out.

If you make a loss you can offset it against future profits but don't ask me how as I haven't done anything like that for a very long time.

This can be a help when you start out and are incurring setting up costs. I am not sure if you will be able to benefit from that - depends what sort of jewellery you make and whether you see yourself buying any big equipment or getting a website created. At that point it would be worth getting an accountant to have a look for you though because if you think you are going to makea signficant part of your income out of this one day, it might be worth forming a limited company.

Thanks again everyone, and thanks Niecie for your blind faith and optimism . I'll have to think about it. So much going on at the moment, need to get my head straight!!

Hi Songbird,
firstly good luck with your jewellery - I hope it works for you - go for it!
I thought I would add a cautionary tale about not telling the taxman about earnings - I have a friend who was doing wedding photography on the side of his 'proper job' to earn a bit of extra cash and had a web advert on a site etc to promote his business and the HMRC spotted his advert and contacted him to ask why he was evading tax on earnings. I know it's a but different but just goes to show that they do look for and notice these things... :)
Let us know how you get on though!

If you sell it for a profit, that is income. If your income (from all sources) exceeds your tax allowance you have to pay tax.