Happy Christmas, everyone, hope you all had a good one.
As of January I am going down to four days a week from five in my teaching job, this is so I can spend more time of my crafty business. My problem is a total lack of advice in the form of books for starting a crafty business in the UK.
Does anyone here run a craft business who can give me some advice on setting up a business so it's legal and money, taxes etc?
Thanks!
starting a crafty business
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Graye
- A selfsufficientish Regular
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- Location: Whitby, North Yorkshire
Re: starting a crafty business
OK, here's my input on this (puts on Tax Inspector's slightly out of date hat).
Firstly is this a business or a hobby? Are you doing this with the intention of making a profit, even if it's some time down the line? If the answer is yes, here's some very basic information.
1. Notify HMRC within three months of starting the business. Choose your accounting date. This can be the usual 31 March or you could make it 12 months from when you start the business, it's your choice.
2. This bit is absolutely not necessary but may be important further down the line - open a separate bank account and keep all business transactions strictly confined to that. The reasoning is that should you ever find yourself under investigation it restricts HMRC access to just that bank account and not all your other private ones. Probably not a big deal but a bit intrusive...
3. Get your "account book" (this can be a simple exercise book) but keep it up to date. On one side of the page have your sales figures for that month and underneath list your stock purchases for that month. On the other list your outgoings for the same month. Give yourself general headings, postage and packaging, motoring expenses and so on. Total each column each month and start a new page, then you can easily do a summary at the end of the year. KEEP ALL YOUR RECEIPTS!
4. Keep a separate note somewhere of your household outgoings - phone, electricity, insurances and so on. You will be able to claim a proportion as a business expense. It will be a relatively small amount but it all helps! Also all your car info, insurance, MOT, tax, etc. And find out a value for it, there is even an allowance available for its devaluation too, called Capital Allowances.
5. Count up the cost (or the market value if this is for some reason less than that) of all your stock on hand at the accounting date and keep a note of that, you need to adjust the figures to represent the value of what you sold rather than the outlay you had on the year (ie cost stock on hand plus sales, less cost of closing stock will give you that).
6. Depending on your turnover you will probably manage to only need to submit what are called three line accounts. This is turnover, less expenses and a profit (or loss) figure. If it IS a loss make sure you return it anyway, you can claim to have it carried forward to offset against later profits or set it off against the tax on your salary. You will get a Tax Return in April with self-employed pages so you can enter this figure. It's pretty straightforward with lots of notes.
That's all you need to do to keep yourself legal and with enough records to show your profit/loss position. Unless your turnover is going to be up in the £70k bracket you needn't register for VAT, your NIC is covered by your employer already and if you don't have employees you have no worries with insurance etc. If youhave customers on your premises you might wnt to check your household insurance policy for third parties though.
Good luck!
Firstly is this a business or a hobby? Are you doing this with the intention of making a profit, even if it's some time down the line? If the answer is yes, here's some very basic information.
1. Notify HMRC within three months of starting the business. Choose your accounting date. This can be the usual 31 March or you could make it 12 months from when you start the business, it's your choice.
2. This bit is absolutely not necessary but may be important further down the line - open a separate bank account and keep all business transactions strictly confined to that. The reasoning is that should you ever find yourself under investigation it restricts HMRC access to just that bank account and not all your other private ones. Probably not a big deal but a bit intrusive...
3. Get your "account book" (this can be a simple exercise book) but keep it up to date. On one side of the page have your sales figures for that month and underneath list your stock purchases for that month. On the other list your outgoings for the same month. Give yourself general headings, postage and packaging, motoring expenses and so on. Total each column each month and start a new page, then you can easily do a summary at the end of the year. KEEP ALL YOUR RECEIPTS!
4. Keep a separate note somewhere of your household outgoings - phone, electricity, insurances and so on. You will be able to claim a proportion as a business expense. It will be a relatively small amount but it all helps! Also all your car info, insurance, MOT, tax, etc. And find out a value for it, there is even an allowance available for its devaluation too, called Capital Allowances.
5. Count up the cost (or the market value if this is for some reason less than that) of all your stock on hand at the accounting date and keep a note of that, you need to adjust the figures to represent the value of what you sold rather than the outlay you had on the year (ie cost stock on hand plus sales, less cost of closing stock will give you that).
6. Depending on your turnover you will probably manage to only need to submit what are called three line accounts. This is turnover, less expenses and a profit (or loss) figure. If it IS a loss make sure you return it anyway, you can claim to have it carried forward to offset against later profits or set it off against the tax on your salary. You will get a Tax Return in April with self-employed pages so you can enter this figure. It's pretty straightforward with lots of notes.
That's all you need to do to keep yourself legal and with enough records to show your profit/loss position. Unless your turnover is going to be up in the £70k bracket you needn't register for VAT, your NIC is covered by your employer already and if you don't have employees you have no worries with insurance etc. If youhave customers on your premises you might wnt to check your household insurance policy for third parties though.
Good luck!
Growing old is much better then the alternative!
Re: starting a crafty business
Free online biz start up advice here http://www.bgateway.com
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yvette
- Living the good life
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Re: starting a crafty business
I like 'The savvy crafters guide to success', though its quite pricey and therefore might be good to get it from the library. Its not too good on the nuts and bolts of tax, law etc. but quite good on the experience of making and selling, photographing work, promotion. I found it very encouraging.
Very best of luck with your business - what will you be making?
Very best of luck with your business - what will you be making?
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yvette
- Living the good life
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Re: starting a crafty business
Just remembered, if you are earning less than about 6,000 a year, you can apply for an exemption from class 2 NI payments - details on the Inland Revenue website (they also have a telphone helpline). I applied for mine at the same time as I registered my business, and it arrived about three weeks later.
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Helsbells
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Re: starting a crafty business
Thanks for all the advice, sorry I only just replied.
This is going to be very useful in the near future.
This is going to be very useful in the near future.