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Hitch

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I dont expect i am the only one here that has wondered this...

I work a full time job, (employed(metal fabrication)). I like doing a bit of woodworking and more decorative side of metalwork now and then in my spare time. :shock:

Obviously the money to do the next project has to come from somewhere, so once I have made something I normally attempt to sell it, usually Ebay or Folksy. Not to mention I do not have the space to keep everything I make. Some goes as gifts to family and friends also.
The thing with ebay, sometimes you might make £5, sometimes lose £1.


Should I be keeping records of this just in case I ever get asked?
I don't want it to become a business.
Keeping track of all the ins and outs would detract from the pleasure side of it I feel, not to mention probably take more time than I get to spend actually making the things.


What has anyone else done in this situation?
 

Gary

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One may argue that your in a bit of a grey area tax wise. Making stuff and selling it sounds like a business.
 

MickCheese

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I would suggest it is a self supporting hobby.

I don't know what the tax rules are for something like this but I would suspect they would not be too interested.

Mick
 

RogerP

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As far as eBay are concerned you are a business and should be registered with them as so. All income should be declared on your tax return.

Those are the hard facts but ....
 

monkeybiter

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IMHO I think if the tax man ever did ask, which is very unlikely unless you've got an enemy, comparing your eBay account with wood prices [maybe throwing in man-hours etc.] would quickly satisfy him that there was nothing owing.
 

Max Power

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3 wise monkeys.jpg


I wouldn't lose any sleep over it, if your only selling stuff now and then and spend the money on tools so you aren't making a profit I wouldn't think anyones going to be interested in your hobby
 

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Gary

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Alan Jones":1o2fzdv6 said:
View attachment 3

I wouldn't lose any sleep over it, if your only selling stuff now and then and spend the money on tools so you aren't making a profit I wouldn't think anyones going to be interested in your hobby
Is that a guess or qualified tax advice?
 

JakeS

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Gary":1mwx0e3u said:
Is that a guess or qualified tax advice?
It's tax advice, qualified by the part where he says "I wouldn't think". :p
 

Hudson Carpentry

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Agreed.

If you don't really advertise that you make stuff thats for sale and make little or no profit then mr tax man will not earn enough from you to warrant bothering you. You make things as a hobby for yourself, said item becomes a personal possession to which later you need to sell to buy something else you need to make the next item you wish to make. You don't put anything on for your time (I assume) when selling and the items you give away will indeed eat up any profits you may make.
 

RogerS

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I would have thought that everything you make is for you own or your families use. Then when you no longer need the item or decide you son't like it, you sell this personal possession.
 

Gill

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Ask the authority itself! HMRC would much rather that people sought its advice first so that it doesn't have to sort out an accounting mess later. A brief email or phone call should resolve matters very quickly.

I seem to recall that HMRC isn't interested in small-scale hobbyists earning a few pennies out of their hobby and there may be an income threshold which would have to be crossed in order to create a tax liability. However, the tax man will be able to tell you exactly what's what :) .
 

TrimTheKing

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From my wife, a chartered accountant and CFO.

Technically you are self employed (in your role making and selling) so you are liable for tax and 'should' be declaring, regardless of the value. In reality though, if it's a few small value bits and bobs a year they are highly unlikely to bother you, but by the law they could.

Re the comment on personal possessions, if it is new then it is liable, only second hand goods are exempt. Them proving it is/isn't second hand would be difficult, though.

Finally, while your eBay account should be record enough to show the sale values etc that could also go against you if you claimed you only sold a few bits and were actually selling a lot more.

HTH

Cheers
Mark
 

Karl

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I'd just add that it is a double edged sword - if you have to declare your income, you can also offset your "trade" expenses against that - machinery purchases can be written down etc. So, on paper, I suspect that you would be making an annual loss and therefore of no interest to HMRC.

Cheers

Karl
 

tomatwark

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While I agree that it is unlikely that HMRC will look at you.

HMRC on the other hand have started to look at Ebay sellers a lot more closely, it is mostly for the guys who are selling a lot of stuff but I would make sure that you keep some records because at the end of the day IF they investigate you it is up to you to prove your income and not them.

Tom
 

9fingers

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If you are employed as well as acting as a self employed sole trader, then any losses in your self employed business can be set against your PAYE tax.
Look also at capital allowances for your tools/machinery, a sensible proportion of your power & phone bill if appropriate as well as repairs to machinery.
I find that a simple spreadsheet is all you need to keep your accounts and feed the answer into your Self Assessment tax return.
I've carried this on into retirement from my 'day job' and now set any self employment losses against my pension income.
Bob
 

Hitch

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Thanks for the advice.

Looking at the last 3 months, or so, i have sold about 20 items, but most with minimal value, many around the £7-8 mark. Take the wood, the metal, the paint etc away, and add into that spending on tools....

I think it may be an interesting exercise to keep track of the ins and outs.
 

chunkolini

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Hi Hitch (mates from another forum).
I started off doing this, kept the cash in a tin in the RatCave.
I began keeping a record after a while out of curiosity. I paid for materials and tools then a push bike, then a holiday.
Went to the tax people, who gave a litttle speech about record keeping. My little hobby paid for itself. They were not interested, but I still kept a clear record, usually barely in profit. But very well equipped.
I went part time in the day job.
6 years ago I packed in the day job.
These little excercises can get out of hand.
 

TrimTheKing

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Something I don't understand with all the comments about using any monies earned to buy tooling. Surely any profits from something you have made are based on your workshop as it stands at the time?

Ploughing those profits into new tools is then buying you a new toy (and different to capex running costs of a business, because you are a hobby), so just because you have bought new tools with it rather than pocket it surely doesn't get away from the fact it's a profit made?

I'm not telling here, merely asking, because in my eyes it seems a bit too easy to circumvent the taxation system. Or is it really that easy?

Cheers
Mark
 

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