Sunday, 9 September 2012

Doing it right.....

Hey Crafty-Bitz'ers,

Over that last few weeks I have been reading various posts on Facebook which have left me dumbfounded.  The amount of Facebook pages which are obviously trading, yet don't seem to know or choose to ignore the laws that businesses have to adhere to, is scary.

Now I don't claim to be completely knowledgeable about the ins and outs of running a micro business, but I do know the basics.

1.  If you intend to sell, even if it's for a hobby, you NEED to register with HMRC.  Many people say they're running a hobby business and do not make enough to pay tax on.  This is not your decision to make, you need to send a return.  Even Charities have to do tax returns. Find more details here.

2.  Make sure you know and understand all of the Distance Selling Regulations.  These are  found here.

3. PLI - Public Liability Insurance.  Whilst this is not a legal requirement, I believe it's vital in today's litigious society.  Could you afford to pay someone out if they filed a claim against you?  It's not that expensive if you look about.  If you're planning to do craft fairs then many will ask for a copy of your PLI insurance before they'll let you have a stall.  Also if you're planning on organising your own fairs then you will need appropriate insurance also.

4.  Make sure you label your products properly...for example, if you make collectible dolls, you should state that they are not suitable for children to cover yourself.  If you sell bath and body products I believe you need certificates to prove they've been properly tested.  I think if you sell food products you need certifications too...(please feel free to put me right on this) as well as correct labelling for allergies etc.

A few months ago a friend of mine made a comment on a Facebook Page pointing out that the person had admitted selling without being registered.  The said person then tried to retract that saying the page was just for showing off her hobby,  (however there were loads of comments regarding prices and delivery times that suggested otherwise).  My friend then got a barrel of abuse from this pages likers....she got called jealous, a hater and all sorts.  People were telling the person that it was ok to sell if it was only her hobby etc.....then when it was pointed out by others that this was not the case, more abuse was thrown.  All my friend was trying to do was point out that HMRC visit Facebook and websites to check for people trading without registering.  Another argument that came out was, 'Everyone else is doing why shouldn't I?'  This doesn't make it right.  It's also hugely unfair to the thousands that are trading legally having registered and who have to factor this into their prices.  These people who break the law and are able to sell cheaply are undermining the creative talents of those who 'do it by the book'  and I don't like that.

This post may not make me popular, but if you're selling your wares, you need to be doing it right!  I am hoping that it will not apply to many, but if it helps one person who didn't realise what was needed then it was worth my while :)

Please do let me know your thoughts.....

Don't forget to check out Handmade Monday over at Handmade Harbour

Take care
Sarah xx


  1. Interesting, what if you are selling to get rid of items? Such as de-stashing or just getting rid of things you no longer want?
    And what if you want to sell (from your own business), but have never sold anything? A brick and mortar shop would be shut if it didn't sell anything, but online it allows people to be flexible.

    1. am talking about making and in Crafting. If you're just de-stashing on ebay or similar then it's not a problem. However if you're buying in to sell on ebay, that's trading and you'd need to be registered.
      I don't understand your second point, I'm sorry.

    2. the second point is simple, what if you are trying to sell, but nothing has sold?

    3. If you're trying to sell, you have to register. Simple. If you don't sell anything in that tax year you state as such on your tax return. You can't start a business and only register when you sell something.

  2. All the hoops you have to jump through can seem a bit of a headache at first when you look into selling, but if something is worth doing it is worth doing right! I noticed someone I knew offering to make people cakes for money, I know there's no way she was registered, or had any kind of food hygiene certificates or anything like that. The rules are there for a reason, and like it or not they ought to be obeyed!

  3. I am with you all the way girl. Annoys me to as you know and they are actually stealing from others who are registered.

    AnimalNikki if you start a business register then not sell anything there is nothing you can do the luck of the draw. If however you then close that business and sell the stock of raw materials that is still part of the business and should be declared when sold.

    If you make and give away as a hobby then destash that is not a business you are just getting rid of second hand stuff. I have listed a load of CD's Roms's on ebay the last few weeks, as they where bought for the business the funds will go through my accounts. Put on a DVD this is nothing to do with the business therefore fgos to my private account.

    Any shop that starts up and fails the stock is then sold off for the creditors, most small individuals do not have that problem I hope but they still need to declare as sale of business stock.

  4. A great post Sarah. Like you I am often (no, always) amazed at the number of people who think 'I only sell to my friends and family' or 'oh, I only do this for a hobby' and that makes it OK for them to sell without being registered with the HMRC. Silly me, I hadn't realised there were different rules and regs for different types of sales/sellers. Hope you have a good week.

  5. I've just started up in business, knitting and although I thought it would be scary its not. I just filled in a couple of forms and hey presto I'm registered, all I need to do is keep receipts for accounts etc. buy stock and do my work - to be honest I think its actually harder to get customers and sell than sort out registering for tax and at the end of the day they are only forms and the tax people are only people! Its just the same as running a house think of all the forms we fill in for house/car insurance and sorting out bills etc. I would suggest to anyone that doesn't register because they are scared to just do it if you don't sell then as you say you just put it on the tax form. You can't put a price on peace of mind. I am proud to have a business if only a teeny tiny one and am happy to pay tax if I need to and hopefully I will as this means I am making a good profit!

  6. Great post, well done on a what is, for some a sticky subject. It's easy and cheap to register, it can be done online and the multiple choice questions about how and where you intend to sell your goodies leave it almost impossible to get it wrong. There are lots of State specific tutorials, video and written provided for all sorts of tax subjects. As I understand it, ignorance is not an acceptable excuse for breaking the law.

  7. Good post. I had to put my name down yrs before I started crafting and in fairness the yearly file still leaves me confused. But it's a must.

    As for insurance - I would now be scared to be without it!

  8. A great post Sarah, very informative.
    Thanks for popping over, I think it's the 'creative' in us that keeps us looking for 'things that are not really there' :)

    Jan x

  9. Thanks for sharing! I will be honest and say I had no idea but do not sell! (phew!)