Info for, and about, Artists and Craftspeople
Tax and copyright seem to be the 2 biggest sources of arguments between small craft business owners.
As the rules stand at the moment, you can earn up to £2500 from crafting without needing to fill out a tax return BUT IT IS STILL TAXABLE! you need to telephone HMRC and inform them of how much you have made over the year so they can adjust your tax free allowance. Not needing to fill out a tax return does not mean you don't need to pay tax.
This changes in April 2017.
Here is the information regarding the new tax break for "micro enterprise"
New tax allowances for money earned from the sharing economy
From April 2017, there will be two new tax-free £1,000 allowances – one for selling goods or providing services, and one income from property you own.
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.
In the same way, the first £1,000 of income from property – such as renting a driveway or loft storage – will be tax free.
We sought some clarification from HMRC as to what this actually means for crafters.
Here's what we found out;
1. This tax break only applies to "irregular, part time and hobby earnings".
This means that if you sell your old bike on ebay then this rule will cover you. If however your income is "regular and advertised" eg you have a FB page selling box frames or bunting, then this is classed as being self employed and you need to fill in a tax return even if your earnings are less than £1000 a year.
2. This is only a tax free allowance. If you are earning over £1000 from your craft business you will not be taxed on the first £1000 regardless of any other income stream you have.
So as of April 2017 the ONLY scenario where you do not need to fill out a tax return is if you are selling sporadically eg a craft de-stash, spare crafting equipment or a one off item you have made.
Effectively if you have a Facebook business page selling ANYTHING, you need to fill out a self assessment tax return.
However all is not lost! New guidance as to how this is going to be implemented has yet to be released. HMRC are keen to make their lives easier by removing a lot of sole traders from the self assessment process altogether. So we may find that the new £1000 rule means that you may only need to fill out a tax return if your income goes over £1000.
Worried about or simply looking for insurance cover as a practising artist?
Working with specialist brokers Hencilla Canworth "Artists Newsletter" have developed a range of insurances for Artist and Arts organiser members.
Public and Products Liability insurance (PPL)
£5m PPL insurance cover is included with Artist + AIR membership. Specifically tailored to meet the needs of practising visual or applied artists based in the UK who require insurance against their legal liabilities to pay compensation arising out of injury to third parties and damage to third party property, which result from their activities as artists. Join a-n as an Artist member to be covered by this £5m PPL policy.
Artists’ Insurance Policy (AIP)
Additional insurance that members can buy to cover artwork and materials, studio and contents, and employers’ liability. Policy benefits are tailored to reflect the diversity of work practice and professional requirements of visual and applied artists. Members can choose from pre-priced ‘off-the-peg’ or bespoke options at highly competitive prices.
One-off exhibition insurance policy
Additional insurance that members can buy to insure their work whilst in transit to and from and whilst on display at an exhibition.
for further details
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