Many people will have hobbies they do for leisure, which they have started to make some money from. For example, buying and selling online or setting up stalls at local markets, car boot sales etc
However, if you establish a regular pattern of making money in this way, which exceeds your actual costs, you probably need to consider if your hobby is a business that you need to declare to HM Revenue and Customs (HMRC).
HMRC follows a number of guidelines called “the badges of trade” that help them reach a conclusion: is it a part-time hobby, that creates an income stream or a business that needs to be declared on an annual tax return?
As there are many criteria to be taken into account, please call us on 0800 0523 555 if you are concerned your hobby may be considered a trade, we can help you investigate and support you with any further help you may need.
By Samantha Skyring FCCA
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.