Tax on selling models

[ShipbuilderMN]

I see in this latest announcement of tax allowances, that after April 2017, they are bringing in a new tax allowance for what I can only describe as "hobby sellers" such as myself.     People who make up to £1,000 from occasional jobs, or selling goods they have made, (using Ebay etc) will no longer need to pay tax on the first £1,000 per year.    For anyone making over that amount, the tax return should be put in as normal, but with £1,000 deducted!

I know that a lot of people have not been declaring small  sums anyway, but I have always "played safe," declared, and paid the tax, so this is welcome news for me!

The above came from the Government website, link here:   https://www.gov.uk/government/news/budget-2016-some-of-the-things-weve-announced

Bob

[VMA131Marine]

If selling kits on ebay, surely you would first subtract what you paid for them from what you received to determine net income. Unless they have a stash of very rare old kits, I suspect most casual sellers don't even break even on that basis.

[ShipbuilderMN]

I wouldn't know about that, as I don't build or sell kits!     My models, being very small, and made from bits and pieces, don't cost all that much to build, so this tax break is an excellent deal for me in the UK.

Bob

[rich2010]

Now, if you were to sell that famous pen you'd write off the national debt!

[SUB-SAM]

If you are making the models for yourself as a hobby then selling them as surplus that you no longer want you shouldn't be paying any income tax.

Could be a bit of a grey area if your intentions were different, but as you recently said you no longer accept commissions, and are making what you want to model for the pleasure of model making, this puts you far away from a commercial activity.

I believe in paying my taxes correctly, but I don't think anyone, HMRC or otherwise would class this as a commercial activity. 

 

Taxation, and relief of, will be aimed more at craft 'manufacturers' of batched items intended to make profit.

[ShipbuilderMN]

I can assure you that all income is taxable!  

HMRC may choose not to bother about the odd sale, but anyone who sells items regularly, and does not declare it, is asking for trouble!      The new rule that comes in next April will take care of this very well, as it is aimed to allow what it calls "micro-businesses" to sell personally produced items to an annual total of £1,000 before having to pay tax, but until April, all income should be declared.        Even after April, it should be declared, but the £1,000 deducted from the income.      Whatever I may say, just about everyone, including Brit Models classes me as a "business"  except when I ask for "trade discount" on materials, and then they tell me I am not a business - "flexirule!"       

Quote:

"People who make up to £1,000 from occasional jobs – such as sharing power tools, providing a lift share or selling goods they have made – will no longer need to pay tax on that income."

I have made three models this year, and sold them all, and also sold quite a large number of self-published e-books and printed books.    Believe it, or not, I also write for pleasure, but  again, I am happy when it brings in an income.    I can go for weeks without building models or writing anything, and certainly do not count myself as a business.       The "short" tax return form is specifically intended to cover this sort of thing!

Bob

     

 

Edited December 7, 2016 by ShipbuilderMN
Added quote.

[ShipbuilderMN]

You may find this interesting:

https://www.thecompanywarehouse.co.uk/blog/2014/04/09/hmrc-clamping-down-on-hobby-businesses/

Incidentally, I have not contributed anything to the comments contained in it.   I only found it a few minutes ago.    But that is a shocking tale of "Greg"  who lost his, and his wife's savings and was bankrupted for this sort of thing!

Play safe - declare it!

Bob

 

 

Edited December 8, 2016 by ShipbuilderMN
Correction

[Drift]

What about "kit selling" companies that still charge 20% UK vat on export orders? That is illegal , but yet most do. 

[ShipbuilderMN]

That is a totally different thing, and nothing to do with me!    

I neither build kits, or deal with them in any way!

I have just given you some very sound advice about selling models on the side - take it, or leave it!

Bob

[Drift]

Hang, on. It was in no way meant as a reflection on you. Just a statement I threw out there. My apologies if you were offended. 

[ShipbuilderMN]

No, of course I wasn't offended      I just wondered why you mentioned kit companies when the subject is selling off models that are built as a hobby!      

Bob

Edited December 8, 2016 by ShipbuilderMN
Speling mistake