Do I need to register as a Sole Trader?

[daniel11]

Hi,

I have a question regarding registration as self-employed/a sole trader. Basically, as a sideline to my hobby (modelling) I have started selling a few bits and pieces of my own design through a website and eBay. I am 16 and earn anywhere between £0 and £100 a month depending on what I produce that month. I have also named the website a different name to my own. I plan to continue doing this regularly, some months I may earn nothing and others up to £100

Do I need to register as self-employed for this small amount of income as I don't think it reaches the threshold for National Insurance, tax or VAT etc.?

Thanks,
Daniel

 

[GraemeL]

From HMRC:-

Selling goods or services
You could be classed as a trader if you sell goods or services. If you’re trading, you’re self-employed.

What counts as trading
You’re likely to be trading if you:

• sell regularly to make a profit
• make items to sell for profit
• sell online, at car boot sales or through classified adverts on a regular basis
• earn commission from selling goods for other people
• are paid for a service you provide

What doesn’t count as trading
You’re probably not trading if you sell some unwanted items occasionally or you don’t plan to make a profit. You can’t use any losses you make as part of a hobby to reduce your tax bill.

G

 

[Scalloway]

DO you have any other income, such as a job?

 

[daniel11]

DO you have any other income, such as a job?

Yes - I have 2 other jobs. I have a paper round which earns me £17.50 a week (sometimes more) and a job at a local model shop which earns me about £15 on a Saturday.

 

[Scalloway]

Your total income looks to be about £3,000 a year. Your personal allowance for tax is £11,000 for this year. So it looks like you are not earning near enough to pay tax yet.

Things will change when you go into full time employment.

 

[daniel11]

Your total income looks to be about £3,000 a year. Your personal allowance for tax is £11,000 for this year. So it looks like you are not earning near enough to pay tax yet.

Things will change when you go into full time employment.

OK. Does that mean I don't need to register as a sole trader to run my website?

 

[paulears]

Yes - HMRC are quite happy with the status of hobby style businesses, and also understand that websites need to appear to present themselves as serious and high volume sometimes, when they are not. If you register they give you a UTR number, and they know about you. Even if you start to make a few thousand a year, they are quite happy with this being declared in the other income section of a tax return.As soon as you start to use expenses to offset your profit to reduce tax liability you've moved into proper sole trader territory. Until then, just keep decent records and carry on.

 

[Scalloway]

OK. Does that mean I don't need to register as a sole trader to run my website?

You don't need to register as yet but when your taxable income exceeds £11,000 (at this year's values) you will need to consider if your income from the website is a money making hobby or a business.

 

[daniel11]

OK. Thanks. So it looks like I don't need to register at the moment, but possibly at some point in the future.

 

[antropy]

I am 16 and earn anywhere between £0 and £100 a month depending on what I produce that month.

"You should tell HMRC if you earned other taxable income and haven’t declared it in a Self Assessment tax return."

"If this income takes you over your Personal Allowance, you’ll pay tax on it."

"The standard Personal Allowance is £11,000, which is the amount of income you don’t have to pay tax on."

So it doesn't look like you need to register.

 

[Newchodge]

I read that differently. The OP is earning taxable income, so he needs to tell HMRC. As it doesn't take him over the personal allowance he son't have to pay tax on it.

If you only had to tell HMRC when you went over the personal allowance they would not have included the second sentence.

 

[Page]

ignore it all and get on with your site

The t**** have not even got time to stop the easily tracked fraud from big sellers on ebay

it is a hobby business - just enjoy it and the extra money it gives you

let the rest of us suffer

good luck