Selling your turnings

[Davy583]

Hi all just wounded where you all sell the things you make websites shops or other any advice would be appreciated bye for now

 

[Bodrighy]

If you want to sell your work make sure you are registered as self employed. Not worth getting caught out. Personally I sell on line, to commission and in galleries,. I found that the smaller fairs e.g. church halls etc are not really worth the cost for me so only do larger shows now. Bif online stores such as tsy aren't really worth it unless you are producing a massive amount of stock but some people have found the smaller ones such as Folksy and Misi are OK. It does depend on what you are making to sell mind. Cheaper end things such as treen pens etc can be profitable at smaller shows as can some smaller bowls but if you want to make more artistic stuff or larger works you need to have your own site and focus on the larger shows or galleries.

Hope this helps

Pete

pete

 

[Davy583]

thanks pete

 

[Woodmonkey]

Depends what you're trying to do... If you're trying to make a living from it then as Pete says galleries or shops (who will take a big commission) will fetch you a much better price, but if its just a hobby or sideline then craft fairs etc will be worth doing to help you recoup some of your costs. I've had an etsy shop for about a year and have had a few sales, it costs very little to run, I would say it's worth doing as long as you are able to take some decent photos of your work.

 

[Rhossydd]

If you want to sell your work make sure you are registered as self employed.

Not good advice, especially so if the OP already has other employment. HMRC aren't always happy about people registering as self employed if they're not actually in business and making a profit.

First try to sell something, then worry about declaring any sales to HMRC if you actually sell things. A phone call to your tax office will get the full details, but most hobbyists trying to recoup their costs are unlikely to make enough, or any, profit that would concern them.

Obviously if you're good and lucky enough to start selling for proper money, then consider setting up as a bona fide business and take appropriate advice.

 

[Dave Brookes]

One of the things told to me some years ago when I first succumbed to the addiction that is woodturning was that,
"If you want to make a small fortune from woodturrning then you must start with a large fortune!"

Dave

 

[Nige52]

Very true Dave.......sadly....

 

[Bodrighy]

If you want to sell your work make sure you are registered as self employed.

Not good advice, especially so if the OP already has other employment. HMRC aren't always happy about people registering as self employed if they're not actually in business and making a profit.

First try to sell something, then worry about declaring any sales to HMRC if you actually sell things. A phone call to your tax office will get the full details, but most hobbyists trying to recoup their costs are unlikely to make enough, or any, profit that would concern them.

Obviously if you're good and lucky enough to start selling for proper money, then consider setting up as a bona fide business and take appropriate advice.

I am sorry but unless they have changed the law recently you are incorrect. When I registered some years ago you had three months leeway but not anymore. Moreover with more and more people going self employed inspectors are checking at fairs and shows as so many are not registering. If you already have employment it can actually be advantageous as I know of a number of people who actually end up having tax rebates. The fines are not something that you want to have to pay believe me.

Pete

 

[dp341]

From the HMRC site

Gail is a full-time employee working for a stationery company. She pays her PAYE tax on this employment every month.

In her free time Gail makes cushions and uses most of them in her home. Occasionally she sells them to friends and work colleagues for an amount that just covers the cost of materials of £15. Sometimes she makes a loss. Any money she does make goes towards her holiday fund.

She decides to make extra cash by selling cushions on an Internet auction site and starts auctioning three or four to see how they go. They all sell for more than £50, a profit of at least £35 each.

She uses this money to buy more materials and within a month she is selling around ten cushions a week, always at a profit, and is considering setting up her own website.

Gail’s initial sales of cushions to friends are not classed as trading. It lacks commerciality and she does not set out to make a profit. The occasional sales are a by-product of her hobby. Once she begins to auction her cushions, she has moved into the realms of commerciality.

She is systematically selling her goods to make a profit. She will need to inform HMRC about her trade, and keep records of all her transactions. On the level of sales shown in the example the potential turnover of around £26,000 is well below the VAT annual threshold so Gail does not need to register for VAT.

I'm no expert but I think they mean, selling the odd thing to friends and family to recoup some of your outlay on materials is fine but once you start trying to make a profit you should declare it to the HMRC. This doesn't need to be any more than declaring yourself a sole trader and completing a tax return. The question then is what expenses can be offset against any money you get. Clearly the cost of materials bought solely for making things to sell is allowed, as are any costs such as auction fees, postage, stall rent, fuel to get to a fair, any tools bought exclusively for the use of your business etc.

I'm not an expert so take this with a pinch of salt but I would assume you could also legitimately claim something for heating & powering your workshop for the percentage of time that you spend making things to sell e.g. if you could reasonably justify that your workshop accounts for X% of your electricity bill and that you spend Y% of your time in there making things to sell you could claim - Electricity Bill * X% * Y%. You could possibly claim a mileage rate for wear and tear on your vehicle, something for the use of your lathe and tools that are not exclusive to your business.

I expect you'd have to be making a fair bit to actually turn a profit, if all you're actually wanting to do is get some cash to help fund your hobby but I think you'd still need to keep the records and declare it in your tax return.

The advice to check with the tax man is good. Much better to get advice, keep records from the outset that show a loss / break even / small profit than getting into trouble for not declaring it at all and paying a fine.

 

[Bodrighy]

When you sell your work on a regular basis it is classed as trading. I was advised by a friend who is an accountant and I wasn't going to argue with her. . Possibly if you just sell the odd item to friends and relatives you are going to be safe but the problem arises if you start to sell at fairs or as is intimated in the passage you quote in a more regular pattern. Whether you make a profit or not is not necessarily relevant. I know a number of people who make their living crafting and technically they are making a loss. At least one had a visit form the tax man who did a complete inventory and found that he was £1 45p out. They warned him that if it happened again he would be fined. he got himself an accountant. The tax laws and those that administer them seem to be a law unto themselves and personally I don't think it is worth the risk seeing as it costs nothing to register and keeping the books using a couple of simple spreadsheets is something that most people can do. You can claim heating, electricity, traveling expenses, tooling and equipment and other materials against it. On paper you can make a loss but if you don't register then you are IMHO simply taking a risk that isn't worth it.

Pete

 

[Tazmaniandevil]

I was self employed for many years, and had a very good accountant who made sure I stayed well within the law. I eventually had to register for VAT because my annual turnover crossed the threshold. This was a totally different ball-park because VAT were Customs & Excise, and have no legal barriers like warrants or probable cause or any nice things like that, where Inland Revenue had to abide by common law and needed the co-operation of the Police to execute warrants etc.

This all changed when the services merged and HMRC was born. HMRC operates under the same legal auspices as the old Customs & Excise. You do not want to mess with them, trust me on this. (I know someone who fell foul of Customs & Excise over a weighing scale of all things)
You can protect yourself from any potential legal difficulties with a simple phone call. I really do not mean this to be as patronising or rude as it looks but......
An internet forum is not the place to be seeking advice on something that could potentially affect your liberty, no matter how many well versed members there are. Even supposing some members were lawyers, tax law is a very specialised area.

Pick up the phone. The HMRC folk are really nice, and will help you decide what is right and what is not. Most importantly they will begin an audit trail, and assign a reference number to your enquiry. If you are at some fair or car boot sale and an inspector turns up, you can quote your reference number and explain your situation.
If you can demonstrate that you have made inroads in your tax affairs they are likely to be far more sympathetic. One thing the tax people do not like is someone who flouts the rules or simply doesn't bother trying to comply.

 

[Phil Pascoe]

:? You obviously found HMRC nice and helpful. We owe them nothing, and we've never, ever dealt with anyone so utterly, totally incompetent.

 

[Tazmaniandevil]

In all honesty, I have never had a bad experience with them. Then again, I last dealt with them when the regional offices were still in play and you could pop in to your local tax office and speak to a person.

 

[Bodrighy]

I have to agree with Taz. I rang them and checked explaining my situation o the advice of my accountant friend in order to be sure and they told me what I have shared here. One thing that they also said was to try and get into the habit of keeping any relevant receipts etc as they can demand a check on your affairs at any time. As said it simply isn't worth the hassle of it all to either try and avoid or simply not bother. I am the worlds worst at being organised but if you can keep a running cost sheet of ins and outs they are happy with that if your income is well below the tax threshold.

pete

 

[Doris]

I started trading last year and only made £600 net profit. The general advice I got was if you are selling to a shop say to write out invoices and keep copies of them. I'm well below the tax threshold atm but still keep them if and when I do go over do I can back up my claims of being below the threshold for however many years