Which is the better model?

[ShipbuilderMN]

Afraid you are mssing something     Quite a lot, in fact!      All income is taxable whichever way you look at it"       My tax allowances are completely eaten up by my merchant navy pension, and my old age pension.    Therefore, anything I earn extra must be declared for tax.     As you say, I do not take private commissions, and am NOT "self-employed,"   as I am now almost 73!   I am registered with HMRC as a "hobby seller," and they are happy with that (they are getting their cut, and that is all they care about!"       The total amount taken for the above models amounts to almost £3,000, so we are not talking "peanuts" here!

Even here on Brit models, I am classed as a "trader," despite me stating that it is  just a hobby!  Consequently I am not allowed to advertise anything in the for sale section!     (Not that I ever advertised models for sale anyway, but I am a maritime writer as well).     That is why I never post "Work in Progress" anymore, I do not want to be accused of "pimping my wares!"       

Bob

[johndon]

1 hour ago, Blastvader said:

Also, I'm probably missing something in HMRC's archaic rules, but why are they taxing you on the results of a private sale? As you say, it's not a commission piece and as such I would have thought that it wouldn't come under the terms of self employment.

 

If you build with the specific intention of selling then HMRC treat it as a business.  If you build something for your own collection that you then decide to sell at a later date it is not a business.

 

John

1 hour ago, Blastvader said:

 

Edited November 15, 2016 by johndon

[Blastvader]

Ah, thanks both for clearing that up.

 

Though it would seem that it is somewhat a case of semantics, especially by @johndon's definition. How long would something have to be in one's collection to no longer count as it being built for sale? A month, a week, a day, an hour? Though I suppose the 'intention' is still there so little difference is made.

 

Cheers,

 

Paul

[ShipbuilderMN]

I build for the pleasure of building, but I also know that someone will purchase them shortly after completion.     HMRC are quite happy for me to be registered as a "hobby seller!"      I am working on the 270th model that I have built since starting counting in October 1992, so I obviously can't keep them.    If I was a millionaire, I would get a bigger house and would keep them - but I am not!

Tax is payable on anything that is sold, regardless of whether it is private or business!     The fact that HMRC do not bother about small amounts does not alter the fact one bit.      By declaring them, and paying tax, I never have to worry about being found out at a later date.      I am always being told that private sales are not taxable, but I assure you they are!    And, as I said, I am not making "peanuts," so it is a sensible move to declare them, and pay the tax bill!

Bob

 

[johndon]

35 minutes ago, Blastvader said:

Ah, thanks both for clearing that up.

 

Though it would seem that it is somewhat a case of semantics, especially by @johndon's definition. How long would something have to be in one's collection to no longer count as it being built for sale? A month, a week, a day, an hour? Though I suppose the 'intention' is still there so little difference is made.

 

Cheers,

 

Paul

 

Definitely a case of semantics but, rightly or wrongly, if you buy to sell or, in this case, build to sell then you are, in the eyes of HMRC a business.  I guess if you built a model and kept it for six months then sold it that would OK with no tax to pay.  If you did it 100 times though HMRC might take a different view...

 

John

[ShipbuilderMN]

In the eyes of HMRC I am not a business.      I told them I was a "hobby seller," and they said that was perfectly OK with them, and that is what is on their "Short returns form!".      I bought a house many years ago, without intending to sell it, but when I did, I was not exempted from tax, just because I had had it for a long time!       Sometimes, I have kept models for several years, but eventually sold them after I tired of them.   My last one, the wool clipper, sold within four hours of putting the completed picture on my blog.    Even so, it was just a completed picture, I did not say it was for sale.    Someone just came along and asked me, and I said yes, it is!       I would have been more than happy to hang on to it for a while.   We have seven models in our permanent collection, but none of them are for sale.      Eventually, when we feel like a change, and have something to replace them with, one or more will go! If you put

Bob Wilson Miniature Model Ships

in Google search, you will find loads of images, but nowhere will you see any advertised for sale, indeed, most of them went years ago!    But try as I might, I cannot shake off this "You are a business" tag!

Bob

 

[kev_1962]

I used to live at the foot of Bidston Hill....the topographical feature not the ship😉 I had no idea there was a ship called Bidston Hill...live n learn I guess

[ShipbuilderMN]

There were a few "Hills," Marlborough Hill, Bidston Hill, Damson Hill, Primrose Hill, Holt Hill.     Here is my miniature model of Primrose Hill, photographed from a low angle, and a photograph of the real sea superimposed on it!      Sadly, hardly anyone builds this type of model any more!    The Primrose Hill was  Charles Lightoller's first ship.    (Senior surviving officer, RMS Titanic)!

Bob

[ShipbuilderMN]

Here is the Primrose Hill model in its sea.

Bob