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Thread: Hobby Vs Business dilemma

  1. #31
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    Er, except this £1000 policy hasn't actually been implemented yet and you cannot currently rely on it.

    It was supposed to be in the Finance Bill but got dropped due to the general election - apparently it is still govt policy so would be expected to be implemented at some point - but who knows when with all the Brexit distractions etc.

    Irritating to me as I sell a v minimal amount of the things I make to cover the cost of more materials (don't worry I factor in costs and don't underprice) but it's hardly worth registering as self employed - would just result in offset tax and presumably there's a limit on claiming that.

  2. #32
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    Quote Originally Posted by belette View Post
    Er, except this £1000 policy hasn't actually been implemented yet and you cannot currently rely on it.

    It was supposed to be in the Finance Bill but got dropped due to the general election - apparently it is still govt policy so would be expected to be implemented at some point - but who knows when with all the Brexit distractions etc.
    Hi belette,

    Thanks for the update.

    Quote Originally Posted by belette View Post
    Irritating to me as I sell a v minimal amount of the things I make to cover the cost of more materials (don't worry I factor in costs and don't underprice) but it's hardly worth registering as self employed - would just result in offset tax and presumably there's a limit on claiming that.
    If you are selling just to cover costs then as far as I understand the current tax law you do not need to register as a sole trader. However, since the Government intended(intends?) to introduce a £1000 annual allowance I would dare say that this figure would be a guide as to how much you can make per annum to be considered a hobbyist by HMRC...this is only my humble opinion.

    I will do further research as I am not ready to start selling anything yet!

  3. #33
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    http://publications.parliament.uk/pa...0102/18102.pdf


    See: Schedule 3 — Trading and property allowances
    Part 1 — Main provisions


    Notes:

    http://www.gov.uk/government/uploads...tory_notes.pdf
    Last edited by handmadeblanks; 22-09-2017 at 09:34 AM. Reason: Added explanatory_notes

  4. #34
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    HMRC applies the law as it is, not as it might be sometime in the future. So a speculative guide figure will get you absolutely no-where should HMRC decide to investigate your tax arrangements.
    www.Pearlescence.co.uk
    @pearlescenceltd
    instagram: pearlescenceltd1

  5. #35
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    Quote Originally Posted by pearlescence View Post
    HMRC applies the law as it is, not as it might be sometime in the future. So a speculative guide figure will get you absolutely no-where should HMRC decide to investigate your tax arrangements.
    Hi pearlescence,

    True. I have not started doing business yet and there are others who are thinking about making the transition from hobby to business. I thought they might be interested in following the progress of the 2017 Finance Bill.

  6. #36
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    HMRC makes it very easy to register online, and if you do cash basis accounting then filling in the the return is a doddle. I informed my home insurance company and they added a clause to say it was ok with no added premium.

  7. #37
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    Quote Originally Posted by handmadeblanks View Post
    Hi pearlescence,

    True. I have not started doing business yet and there are others who are thinking about making the transition from hobby to business. I thought they might be interested in following the progress of the 2017 Finance Bill.
    If I understand correctly, since Finance (No. 2) Act 2017 appears on the U.K Government legislation website under the directory 'enacted' that it is now an act of parliament, in other words, law? If so, it is very welcome news to micro-entrepreneurs like me and I'm sure many others in this forum.

    Page 145

    783AD The individual’s trading allowance

    (1) For the purposes of this Chapter, an individual’s trading allowance
    for a tax year is £1,000.

  8. #38
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    Enacted means passed by Parliament. Does not mean it is in force
    However, while it does mean a bit more work, declaring even the most tiny enterprise does have rewards - all your expenditure can be off-set against income so that you can mae a loss which will reduce your overall tax bill. set up a separate bank account and that just about does the annual accounts for you if you put everything through it. For small businesses HMRC doesn't want detailed accounts, just a few final figures. Takes couple of hours max
    (Oh for those easy days before VAT and corp tax)
    www.Pearlescence.co.uk
    @pearlescenceltd
    instagram: pearlescenceltd1

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