The Sticky Topic of Pricing

[Blue Box Studio]

I phoned up and was told that I had to fill out a tax return, even if I made no profit, that was only last year.  Janet

Their definition to me, when I asked to call it a hobby as I was working part time and, at that stage, not making a profit for several years was - do you buy in raw goods to sell on as a finished item for more than the cost of the components OR are you just clearing out your hobby box at cost price so you can make space to make something new but when initially made had no intention of selling, just making for fun.  If the former (which I do) then you are a business, if the latter you are a hobby.  Since I then made a loss for a few years - had to buy new shedio, old one needed repair etc, and claimed quite hefty losses against my taxed income (the rebate bought my kiln one year!) not once have they said 'not paying you back Mrs, it's a hobby'.

And yes, if you are a business you need to fill in a tax return.  It's not difficult if you do it online.  Once I have the paperwork together (that's the hard bit for untidy me) it takes no longer than an hour with several tea breaks in the middle.

And if you are a business you need to sort out your self employed class 2 NI stamp - unless you are very successful you can probably get an exemption from paying which you renew as appropriate every couple of years. 

[Purple Cobwebs]

The "hobby" issue is a tricky one.

If you are trading as a sole trader and making a loss, then you can offset the loss against other income and so get a tax refund. HMRC don't like hobbyists offsetting losses against the day job year after year and thus paying less tax!!!! Thus they will often ask hobbyists not to file accounts.

HMRC usually look at intention and badges of trade. Are you buying the glass with the intention of making beads to sell? Or do you buy glass to make beads for yourself, and then sell on the ones that you end up not using, and never make a profit?

They don't like to set down a hard and fast rule, as then the tax specialists would use said rule to find a loophole and cook up another tax avoidance scheme!

[helbels]

Well I did my tax return and made a loss for the first two years, and tHMRC never never offered me a refund or a tax code adjustment (I have a full time job and pay tax via PAYE on that)!

Last tax year I made a profit, and now they want their share, which they will recoup via my tax code in the next coming tax year.

[Purple Cobwebs]

On the return you have to complete the box that says "offset against other income". They'll not do it for you as they don't like paying out ;-)

If you didn't do that you should have claimed to carry the losses forward. You then offset the losses against the first profit that you make.

If you've not done either, you can resubmit the last return with amended figures.

[helbels]

Thanks Gaynor, I think I'll just cut my losses and carry on properly from this year.  I didn't realise I had to do a stocktake for the first two years either, so had to play catch up this year (hence my impressive profit this year!)

[Dee Dee]

I'm interested to know how you actually do a stocktake - must be a lengthy procedure?

[helbels]

Yeah it is...  You basically just weigh everything and then work out the value of everything that way,  or work out cost per rod and then count rods per colour and work out the value etc.  Frit and murrini are a pain!

[nete]

bit of a slur on the old papercrafting there!  

Apologies to any papercrafters that I may have offended. That was not the intention. I was a papercrafter for many years myself and did not mean for it to be derogatory to them. I just wanted to use it as an example for the type of investment needed to persue this craft. Yes you can spend copious amounts of money on papercrafting (and I did) but it is not necessary to produce a card. You do not have to invest in £600 for a kiln, rent Oxy bottles whether your using them or not or buy oxycons, torches etc, before you can even consider trying this. And yes the example highlights the ease of learning. I could produce a saleable card quite quickly and quite easily whereas I have invested far more time and effort into producing a respectable bead. (and some may say I'm still not producing a respectable bead). It is easy to take these things for granted and forget them when you are working out you pricing. That's all. Sorry.

(Hangs head in shame)

[Blue Box Studio]

Well I did my tax return and made a loss for the first two years, and tHMRC never never offered me a refund or a tax code adjustment (I have a full time job and pay tax via PAYE on that)!

Last tax year I made a profit, and now they want their share, which they will recoup via my tax code in the next coming tax year.

You can claim back for the last 7 years.  It's a box on the form, something like 'do you want to offset any losses against other income'?  I'd give them a call and ask how you go about claiming them now.

[Niki Gough]

Nete I did not take offence at all, sorry if it came across that way hold your head up high and you are definitely making respectable beads x x x

[nete]

 

[jammie]

  no offence taken either my comment was more tongue in cheek than peed off no worries! 

[Barnacle Bay]

What would be interesting to know and I am not too sure if it has been posted some where on here, is if there is a 'simple' formula for working out how much propane is used in 1 hour? Would be great to know?

[helbels]

Easiest way to do it would be to weigh a new, full tank, and then work out the cost per gramme or whatever, then use it, and weigh it again at the end of the hour.

[Shirley]

It varies according to what torch you use. When I was using a hothead on bulk I used to reckon on around 100g of gas per hour (40 hours from 3.9kg tank). Not tried to work it out on my bobcat but probably a lot less than that.