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Tax Tips for Selling Craft

“Handmade” is en vogue and crafters everywhere are turning hobbies/addictions into businesses and selling their handmade crafts, but some are finding the making-money part a bit tricky. Competition is fierce, and while most consumers love the one-of-a-kind, you-can-see-the-fingerprints look, they don’t always love the price-tag. Luckily, whether you sell the odd candle to workmates, or have been picked off Etsy to design a Habitat range, you could be wealthier if you made friends with the taxman.

Who can claim back taxes?

Professional crafters with concession stands in John Lewis and features in Ideal Home can claim back tax on all kinds of expenses, but even some small-time crafters could too. Many people see their craft as a hobby, and don’t declare income to HMRC. However, if you’re making a profit it’s often a legal requirement, and with or without profit it might be beneficial to do so.

The key to understanding if you’re eligible or not is honesty, and if in doubt a quick chat with an accountant should clarify things. Selling goods at markets or online sites like Folksy are good, though not always definitive, signs of commerciality. Generally, you have to make a profit (sell your goods for more than you spend on materials) for HMRC to consider your activity as trading.

However, plenty of businesses use loss-leaders to grow their customer base, sell early models at cost-price to test the market, and offer discounts to friends. If you do plan to make a profit, selling just one mug or birthday card or crocheted dog jerkin could be enough for you to consider yourself a professional, and start claiming back tax on business expenses.

Crafters’ Allowable Expenses

When calculating allowable expenses, honestly weigh up your percentage personal against business usage. To claim back tax, you must be a taxpayer, which means having an income over the annual personal tax allowance (£10,600 in 2015). However, even if you aren’t currently a taxpayer, keep records as in future you could declare previous ‘trading losses’ and lessen your tax bill.

Materials, stationery and equipment may seem obvious, but crafters often forget items which fall between personal and business. They’ll declare their new sewing machine or pottery wheel, but forget using their dental floss as bead wire, their personal computer to manage their business, or the household oven to bake Fimo.
You can claim back for rent and rates on a studio, but if you work from home you can also claim for the percentage you use for your business in terms of rent/mortgage, gas, electricity, water and general maintenance. If you use your phone to call suppliers, organise bookings, or make sales, a proportion of your phone bill can be offset too, as can business postage, or the cost of transporting your goods to a fair.

Marketing expenses are allowable, and these include advertising, PR, and website costs. There’s plenty of advice on how to do it yourself on this very blog, but sometimes it’s a good idea hire a professional. Journal and membership organisation subscriptions are allowable, such as Ceramic Review, Let’s Knit! or The British Sugarcraft Guild.

Travel costs to craft fairs, trade fairs, courses, talks and so on are allowable, and this extends to research trips. Research and development tends to be the most neglected section of small businesses, especially in the creative sector, partially because creative R&D doesn’t feel much like work. Courses, related books like The Tomb of the Unknown Craftsmen or Hilary Pullen’s very own Online Marketing for Your Craft Business, competitor’s products, and even a proportion of costs incurred conducting research into Chilean basket weaving, involving a return flight and a four star hotel, can all be considered business expenses.

How do I do it?
One call to HMRC is all it takes to register as self-employed. People often find the idea of a self-assessment tax return incredibly daunting, but HMRC keep making it easier. While you must keep records of all of your costs and income, when it comes to filling in the form, so long as you aren’t earning over the VAT threshold (£82,000 in 2015), you can enter these as lump sums, so it really isn’t a huge administrative burden.

HMRC likes to nurture entrepreneurial endeavour, but they don’t like fraud. The most important thing is to be meticulously honest about what you spend on your business. If in doubt, always consult an accountant.

This guest post was written by secret potter Natalie Butlin from Accounts and Legal, small business accountants in London offering a full range of tax and accounting services. With everything from self-assessment and VAT returns, to business plans and financial forecasting, Accounts and Legal is a one-stop-shop for your craft business.

Folksy Friday - How does your garden grow?

Handmade Gifts for Garden lovers - All made in the UK! (Scroll down for individual links)

Happy #FolksyFriday - it's been ages since I've posted a Folksy Friday and I thought it was well overdue for me to pick a few beautiful products from this lovely (and 100% British) handmade marketplace!   

Want to Join In?  Post your own Folksy Friday!

If you've never done a 'Folksy Friday' before it's a great way of supporting designer makers from the UK, you just pick a selection of items from the handmade products or supplies on Folksy!  

It's also a great way to network with fellow bloggers who love craft - and if you sell on Folksy it's a good way to help raise awareness of the site. Post the link over in the Folksy Forums too and give the sellers you've featured a quick tweet/tag to let them know.

Love it - But how did you make that picture collage?

I used picmonkey to make the collage, just save the images and then upload. So simple and quick - but you must be sure to add links.

I've also shared all the images below individually in case you'd like to pin them to your awesome Pinterest boards...  (hint hint!)

Post links to your own Folksy Friday's in the comments below so I can come and see them - and tag them with #FolksyFriday when you share on social media! You can even share them on Instagram.

A photo posted by Hilary Pullen (@craftbloguk) on
I'm obsessed with gardening...

That's my daughter in our nearly 100 year old greenhouse! You may have noticed from my Instagram feed that I've become a little obsessed with gardening, more than ever before since we moved house last year. This picture was taken the day we moved in, we've done a lot of work on it since then, we're slowly renovating it with a self imposed deadline of 2019 when it will be 100 years old and we'll have a big garden party to celebrate.

Real Flower in Resin Pendant - Wishes on the Wind

Pencil Shop Dreams!

Some days I feel like dropping everything and opening a pencil shop! Ok, well actually that daydream only happened today when I stumbled across this gorgeous pencil shop - they just sell pencils. It's so simple and beautiful as a business idea.

I'm not sure a pencil shop would make lots of money in a seaside town in North Wales - but I would be very happy indeed to be surrounded by beautiful pencils... maybe I should just have pots of pencils in my office.  I might sell notepads too (or would that spoil it!)

This shop is CW Pencils run by Caroline Weaver and it's stunning! - The shop is in New York (and online). I hope Caroline makes millions selling these luxury pencils - what a great idea that really appeals to creative people from all walks of life.

"CW Pencil Enterprise of New York City was founded in November 2014 by Caroline Weaver, amateur pencil collector but lifelong pencil lover. What we're trying to do is dig up the stories and origins of these objects and make them accessible to those who appreciate them for their functionality, beauty and history as much as we do. As simple as it may be, the pencil is something which despite advances in technology will never become obsolete. Whatever you may use them for, we want to make sure that you can have any pencil your heart, hand, or collection desires."

How to search Google more effectively and find the best content!

craft marketing tips book

The Art of Effective Google Searching

Most of us now rely on Google for finding information, but the vast majority just type their search in and look at the top results. In this post learn to use Google more effectively so you can find exactly the relevant content you need. 

This post is a little edited snippet from my book that I thought you would find really useful. 

What's Inside - Ars Thanea

I'm fascinated by the images in this nutritional campaign by Ars Thanea!

Take a look at these fun pics which are designed to make you question 'What's Inside' your food and head over to the Ars Thanea website for all the details of the client and the brief for these amazing images.

Crochet Flip Flop Pattern

Crochet Flip Flops!!! I love them, not sure how they will cope with water, I'm dreaming of hot summer evenings when I'm wearing my own pair of handmade crochet flip flops... and I'm picking which colour to have them in, as I plan to make loads of these! Can someone order me a free weekend for crafting please - does anyone else ever get a little bit carried away when they see a gorgeous new pattern! :)

Make Little Boiled Egg Chickens!

This is one of those must share moments - spotted these whilst browsing pinterest!  There's a tutorial here if you need it :) Boiled Egg Chickens  - They're fab and I will definitely be making these for an Family Easter buffet I'm planning.

I CAN KNIT - Simple Stylish Knitting

I really love knitting -  I've made scarves, gloves, Christmas Stockings, a little pair of slippers and quite a few blankets - but nothing particularly complex and recently zilch. I felt my knitting needles were getting very rusty (even though I have bamboo needles!).  I'm sure I could be good I just need a little help to get to grips with using different stitches and learning to read patterns more fluently. 

Little Crochet Button Flowers!

These little crochet buttons would be lovely as a little brooch on a coat or decoration for a bag - it's a really clever idea and will be easy enough for a beginner crocheter.

Designer Insights Interview

An Interview I did with Terry's Blinds recently!  What do you think of my choices :)

Share a 'How to' and you could win £250 of John Lewis vouchers #perfecthomeraffle


This is a pretty exciting competition and it is very easy to enter!

Fun Christmas decorations - Painted Peanuts!

These fun Christmas painted Peanuts were created by Etsy Seller Raw Bone Studios!

I'm currently planning a Christmas tree and making up handmade ornaments to hang alongside a few traditional baubles - these would be great fun to make with the kids!  Looks like you would just need some wire, paint and a little bakers twine :)

OPTIMISE YOUR BLOG POSTS! - and get more Facebook Likes!

Bread and Water can So Easily be Toast and tea - by Steph Says Hello

This lovely poster from Steph Says Hello, should be your mantra! - Why settle for bread and water when you can 'optimise' them and turn them into toast and tea!  Apply this to all of your blog posts :)

Today I thought I'd share one tip with you that will work to boost your Facebook likes if you have an archive of blog posts that bring you traffic and hits and not much else. PBU's = Popular But Useless posts.

Anna Hrachovec - Mochimochi Land, The Cutest Knitted things EVER!

Whilst on the hunt for some lovely Christmassy knitting patterns to share on my Handmade Christmas page...  these cute snowmen caught my eye.

Ebola Crisis Appeal

I just heard these words on the radio with news that Bob Geldoff is releasing a new charity single version of 'Feed the World' - his words were incredibly powerful and really stirred me,  I copied them down so I could share them.

Buy Handmade This Christmas!

Head over to my Facebook page Handmade Christmas and tell us where you will be selling your crafts this year, on or offline!  

Upcycling Challenge - from Bricks and Wire to Chic Lamp and Shade!

Claire at Clairabelle Makes blog has teamed up with trade and construction training provider AbleSkills to run a super fun and creative upcycling challenge to make something for your home using old building materials.

Pine Cone Christmas Decorations

Christmassy Pine Cone Garland

In my new house I have some lovely Victorian fireplaces so I'm really excited about decorating them for Christmas.  Here's where I found these beautiful pictures - Pine Cone Garland

Oink Oink Egg Cozy - Felt Giveaway worth over £35!

I have a big bundle of 100 sheets of felt to give away to one of you via the lovely people at Viking Direct - see the details of what you will win here - Pack of Coloured Felt


Entry is easy - leave a comment on the blog with a link to your favourite felt tutorial or make from a craft blog! (it can be your own tutorial or can be from a blog you like, just paste the link in and let me know why you love it)

NB If you'd like to be entered into the draw TWICE please also share this post on Twitter, Google+ or Facebook and be sure to tag me +Craft Blog  @craftbloguk and Craft Blog UK on Facebook (although you must leave a comment too!)

The winner will be notified by email (entries close 17th October)  Good Luck!

Felt Egg Cosy Tutorial

It started with a lot of scribbling in my sketch book - you can just make out the pig idea!

Make a Pig Egg Cosy!

I thought a make up a little felt tutorial myself! I made a cute little pig egg cosy, these would make lovely gifts for kids (although I gave this one to my mum!) 

I actually used Pi today when sewing up an egg cosy!  I had to work out the circumference in order to ensure the little template I made covered the egg cup properly.  

I made a really simple template egg cosy shape ensuring it was big enough to fit the egg cup when sewn up, basically just an elongated semi-circle and cut two out of the pink felt and then cut out a pair of ears - I just did this freehand.  Then I sandwiched the ears in and sewed up the edge.

The ears popping out as I turn it right side out!

I made the ears reall oversized so it would look more fun!

I found a big wooden button for the snout - needs to be a two hole button, the bigger the better in my opinion and stitched it on with some dark pink thread.

Next I embroidered on some piggy close set eyes.

The ears needed a little definition so I stitched a little tuck at the bottom of each to give them some shape.

and voila a super quick project that a child could sew up!  I'm going to make a little set of farm animals egg cosies as a gift!

I can't wait to see all of the tutorials you share in the comments - don't forget to say a little about them!

Fingernail Art - Impractical but Awesome!

Thought you would love this crazy fingernail art from Alice Bartlett!  A bit impractical maybe but brilliant all the same - a little community on her fingertips! :)

amazing nail art little people on nails

amazing nail art little people on nails

amazing nail art little people on nails

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