Do you declare your crafty earnings?

[suzi2]

Do those of you that sell your products declare your earnings to the tax man? I was just wondering as many of you have websites etc and that would make you pretty visible to the tax man.

I'm not sure what to do...!

i haven't as such but keep detailed records of all purchases and all sales; just in case i ahve to.

but guess which is greater - sales or purchases????

I put it all on my tax return but it's not enough to have to pay tax.

I do but expenses out are far to high for me to pay any tax.

Legaly it doesn't matter if you make a profit or not you should still be filling out a tax return. Legally that is. As a small business you should also register as a lonetrader and pay the self employed rate of N.I.

If and I do say if you go official, get advice and keep the receipts for everything. Claim for things like milage for collecting stock and going to fairs. That way you keep your paper profits looking very poor. The business gateway (sorry can't remember the English version will advise and often run day courses covering paperwork.

From the horses mouth at the tax office they don't really worry about small businesses unless you do something to attract their attention or get dobbed in. I am official and still have to do last years tax return groan.

DH has a small business and ttle money 9it's his hobby paying for himself more than anything else). He is registered- which was really easy on the phone- he gets to declare small earnings and as such pays little or nothing, but he does have to keep the records.

Under the PAYE sheme that is if you were employed by someone
You are allowed to earn something like £4520 a year before you pay tax. Not sure what the latest standard tax code is this year, if it's 452L then the above amount is correct.
After the amount and after they take your pension contribution away you will pay tax @ 22% and NI at 11%. That means you can earn £86.92 a week before paying tax and NI
So if you earn £100 and you are not in a pension scheme you will pay Tax & NI on £13 which means roughly you pay £4.29 Tax & NI combined
However if you are a small business you can claim for all sorts of things go onto the Inland revenue site it's realy helpful But I wouln't worry if you're earning under £86.00 a week

As a sole trader the personal allowance you get counts for your self employed and employed earnings. All the profit you make is counted as personal earnings regardless how much you draw, so it helps to keep your profits low on paper.

Even if you are under your allowance you still have to do a tax return and register as a sole trader (legally)

Dh was told by IR that his employed earnings DIDN'T countas he is exempt due to only earning under £1K a year (in reality this year will be about £50 I reckon!)

Was that not right then? It seemed right in the handbook we were sent.

I did procedure writing & legilation for payrol for 5 years, finished about 2 years ago and as far as I know you don't pay tax or NI on anything under the current tax coding, so if your tax code is 452L that means you can earn £4520 a year which is about £86 a week before paying Tax or NI thats on the PAYE scheme.
I could be wrong

Sorry for the bad spelling mistake should read legislation

I am not sure if there is a level of earnings allowed that you don't have to declare, perhaps there is. I thought you had to register if you were self employed, fill out tax returns and pay NI whatever your earnings are even though it may be within your allowance. So even if you are registered you don't have to pay tax on it.

I am not an expert by any means, just going with the information i got.I think what ever the legal position is they are not going to be interested in card makers that earn £50 a year and do a couple of craft fairs and have a gallery website. Once you start trading regularly and have an e.commerce site they might be more interested, again I am no expert.

Oh you are right caroline, you DO have to register, (DH doesn't do cards btw, dj equipment, think it keeps him 'young'- !!). it's just i think there's a very new thing called small e arning declaration, which gives you something of a leeway.

As for the not bothering... I used to work for VAt Customs and Excise- personally, I'd say register. If you buy from someone who is being investigated and the link goes back to you, there's a stiff fine and a big tick for the investigation team- or there was ten years ago, anyhow.