Hobby to self employment

[Gailf84]

Hi there, I have been crafting as a hobby and recently it has been getting quite a good response from people, so I am considering starting to sell these items, and going self employed, I wouldn't imagine I would make much money from it at all. I currently claim child tax credits for my 2 children but would have to declare myself as self employed, would this affect my child tax credits? Thank you!

 

[StevensOnln1]

If you are selling the items you have made for anything more than the cost of materials you would need to register as self employed and file a tax return each year. I don't know what would happen with regards to tax credits but hopefully someone else will see this and be able to answer.

 

[Scalloway]

Your self employed income will be added to your other income for calculating what tax credits you are due.

 

[Simply Business]

Hi @Gailf84, awesome to hear you're thinking of turning your hobby into your own business! This type of craft business is booming at the moment, with there being a real desire for individual, one off items! Good luck with it all

 

[Gailf84]

Thank you very much for your replies! I'm really new to all of this, so I'm sorry if my question is daft, but I only claim child tax credits, not working tax, but as it would be crafting from a hobby perspective, I wouldn't earn a lot, sometimes nothing at all, and couldn't really say how many hours I would be working, if I was only to earn a very small amount, would that affect my child tax credits? Thank you again!

 

[Gailf84]

Thank you very much @Simply Business, I'm nervous about the thought of it all, but people seem interested and its would be a dream to do, but I have searced and can't find much about if it will affect child tax credits, and as I don't know how much I'll earn, and like I said it might be hardly anything at all, I worry it'll be a lot of hassle for nothing. Thank you again!

 

[Scalloway]

I had a small small self employed income and claimed tax credits. I used to give an estimate for the claim then gave a finalised figure when HMRC asked for it. UK.gov advice on what counts as income for tax credits here

https://www.gov.uk/claim-tax-credits/what-counts-as-income

 

[Gailf84]

Thank you so much for the link @Scalloway, just had a read through it and think I have a slightly better idea haha, so hoping the child tax credits for the kids would still be ok on a very, very small income, it's just weather I'm brave enough to start up by myself now I suppose, And I do worry about the paperwork/ business side of things as I'm not experienced in this at all, thank you again!

 

[moo-tique]

Thank you so much for the link @Scalloway, just had a read through it and think I have a slightly better idea haha, so hoping the child tax credits for the kids would still be ok on a very, very small income, it's just weather I'm brave enough to start up by myself now I suppose, And I do worry about the paperwork/ business side of things as I'm not experienced in this at all, thank you again!

It's not as bad as you think. There is so much help and support out there including members on this forum who will i'm sure be happy to help you out. If it's all a bit daunting, you could always hire a local accountant to complete the self assessment forms for you?

 

[Rebecca Walton]

How exciting! I love meeting people at the beginning of starting their new business. It's one of the most daunting times, I know. However, it won't be long before you're in the swing of things. It seems as though your questions about tax credits have been cleared up, so I thought I'd just give you a couple of tips for the other admin-type stuff.

Use as many free tools out there as possible! I've actually got a guide on free tools for startups going up soon. If you want I'll drop you a message with all the ones I've included. There are schedulers, accounting tools, that kind of thing. Being organised is the key to running a successful business. That and a few other things, but I'm a completely organisational freak. Lists, lists, and more lists.

Read guides and how-tos as often as you can. I am always reading if I'm not writing. On the toilet, on the train, eating my lunch. You'd be surprised at how much useful knowledge is on the internet; given away for free. Of course, there are also places like this.

Just jump! One of the best things I ever did was take the plunge into becoming self-employed. It was so scary (and exciting) but I wouldn't change it for the world. I'm getting to do my hobby every single day and I'm getting paid for it. What could be better than that?

All the best of luck in your new venture! Feel free to drop me a message if you're ever stuck.

 

[Simply Business]

Inspiring pep talk @Rebecca Walton What is it you do in your business if you don't mind me asking?

How are you getting on @Gailf84?

 

[paulears]

you might find a local accountant who offers free 30 minute sessions to get you going? Remember that when you are self-employed you pay your taxes and get benefits based on your profit, so in the early stages you will probably not make much profit anyway. Normally, HMRC will decide to ask you to perhaps pay something on account, or they may not, leaving you to pay in arrears, once the year has finished and you do the accounts. Perhaps worth a call to them for advice - you'll need to talk to them anyway to set up a URL number and the system for paying National Insurance. Loads of positive things about working for yourself. I've been doing it part time since about 1994, and full time since 2004, and while I can't pretend to be rich, I make a living doing exactly what I love doing. I have a high turnover and a lowish profit, but I'm so much more happy than when I had a boss! My business started as a kind of hobby, and just grew. Get some decent advice - the accountant I saw convinced me that as my business was small and simple, he would save me far more than he charged, and was as good as his word - as the business grew, he still saves me money.

 

[Rebecca Walton]

Thanks @Simply Business - I'm a copywriter/digital marketer Although I worked in sales, recruitment and a few other industries before I went self employed.

 

[Gareth064]

Hi @Rebecca Walton, this post you are talking about regarding free tools... can you message me also? My partner has just started her home made personalised craft business and I am trying to get (free) tools in place to keep track of everything that needs tracked I am currently doing things in excel for her but I would rather have tools dedicated to that task. Thanks.