Selling handmade goods

[l154_ben]

Hi,

I make earrings, signs, bunting, knitted baby clothes, gifts, etc and thinking I should start trying to sell a few things on eBay- in the hope I can earn some pocket money, now I've finished work.  What is the best way - do I sell as a personal seller or should I open a shop?  I haven't got a clue about setting up a business and in my eyes, it is still just a hobby, any pointers would be appreciated.  Thanks all. 

[moldosgifts]

As you make things to sell you are a business, if you want to stay the right side of the law as a business you must give details you cannot do on a private account and register with HMRC.

Hobby, past time, bit of extra cash whatever HMRC do not give any leway if buy or make to sell new or used your a business.

Unfortunatley businesses do not get free listing, you can open a shop if your are private. 

But i strongly recommend you go the legal route.#

Best of luck

[magpiecorner1]

Depends.

This is from the HMRC website, GOV.UK.

"You do not need to be registered as self-employed if you earn £1,000 or less in a tax year as a sole trader. But you can choose to stay registered to: prove you're self-employed, for example to claim Tax-Free Childcare. make voluntary Class 2 National Insurance payments."

If you do decide to register this tax year (to 5 April 2025 you have until October 2025 (5th, I think) to register.

If your business turnover is £1000 or below this year, but over that figure next year, you have until October 2026 to register.

My advice?  Check out the website, and write to HMRC for their advice, quoting the website would be a good idea.   If you do decide to register and your turnover is under £1000 you just tick the box on your self-assessment.

Never underestimate the advantages of becoming a business, read the website and become familiar with what you can claim as expenses.  If you are on means tested state benefits, ask for help because they can help people to become self employed.

But if you are just selling a few things - at the moment - there is no need to register and, theoretically, if you are not a business you can sell on a private account.

Now I am going to put on my hard hat and hide under the parapet!  And happy to hear any opposing argument!

[l154_ben]

Hi,
Thank you for your advice, I do appreciate your input.  I’ll do some more research as I don’t expect to be taking over £100 pcm and believed I would not need to declare to the tax office unless I took over £12,750 per annum. I would set up a shop in a heart beat if I knew I could offset shop fees with items sold, but to be honest, I’m not confident that I would clear costs - the market is already quite healthy with handmade goods. 
Many thanks once again. 


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[arkwebus]

Do please remember that as a business it is your "profit" that is important not your "turnover".  

From your turnover you subtract any expenses [materials and the like] plus any eBay fees.  

Your total income is then relevant for HMRC.  Money from jobs, pensions etc plus any profit [over £1000 if I recall].  If still under £12570 [whatever] then no tax to pay.   If over the allowance then 20% levied on the excess.  @l154_ben 

[ett1954]

The trader's allowance is £1000 turnover not profit.  If you are receiving even a penny more than £1,000 as a business then you are obliged to register for self assessment.  It is at that point you can offset allowable expenses (postage, stationery, etc.) against your takings on the self assessment to determine your profit.

Any declared profit will taken in conjunction with any other income received (savings interest, separate employment income, etc.)  They will then calculate whether the is any tax to be paid from your completed self assessment.

If your taxable income is less than £12,570 then, yes, it is unlikely you will be required to pay any tax unless any benefits you receive had implications.

[sml192]

You don't need to register with HMRC and pay tax unless your sales for the year are greater than £1,000.  The £1,000 trading allowance is based on turnover, though, not profit. 

Please, be aware that even though you might not need to register with HMRC and pay tax your sales will be automatically reported to HMRC once you reach 30 sales or 2,000 euros (approximately £1,700).

As you are intending to make things to sell you will need to upgrade to a business account in order to comply with UK law (Consumer Rights Act 2015):

Business sellers are required to follow all government regulations, including registering as a business on eBay, and providing contact information and a return policy.

An eBay seller must register as a business if, for example, they sell items they have bought to resell, they make items in order to sell them, or if they buy items for their business.

[l154_ben]

Thank you for breaking that down, I think I have a better understanding now! It can be a bit of a minefield when trying to start up.
Thanks once again. 


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[indigo-island]

Hello!

I make things, I sell things, some on here, some elsewhere and if I'm feeling brave at craft shows too.

As above re HMRC

Just one thing not mentioned - you mention knitted baby clothes and gifts etc.  Check very carefully the rules on testing for anything that could be classed as a toy for a child.  There are all sorts of tests that should be done to be compliant. Its why I don't bother as it's not worth the effort for me.

Good luck xx

[moldosgifts]

If you expect to sell more than £1000 in good or over 30 items or both in a year. Register .Turnover is the key NOT profit.

If in doubt HMRC is your place to get information also a free session at an accountant would help.

Turnover is what it sold for including postage profit is less your fees and postage you paid other things can also be duducted envelopes, petrol etc. That is your profit. 

[l154_ben]

Thank you, really appreciate your input.  Will now trawl thru HMRC! Thanks once again 😊
Regards 
Lisa


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[l154_ben]

Hiya,
Thank you for your advice, really appreciate it.  I’ll delve deeper into HMRC.  
Kindest regards
Lisa


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[l154_ben]

Hi,
Thanks for your advice - I didn’t think about testing the knitted baby clothes!  I know toys have to go through rigorous testing but wasn’t aware of knitted baby clothes - will rethink that one then! 
I know what you mean about craft fairs, I’m not confident - the last one I enquired about wanted me to have a trader’s licence from the local council 🤦‍♀️
Thanks once again for your advice.
Kindest regards
Lisa 


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[l154_ben]

Thank you,
I will follow up with HMRC and look into speaking to an accountant.
Your advice is very much appreciated.
Best wishes
Lisa


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[myriad*seller]

---

@l154_ben wrote:

 the last one I enquired about wanted me to have a trader’s licence from the local council 🤦‍♀️

---

Yes, because you make items to sell (one of HMRCs badges of being a trader), so you are legally a sole trader which means you must be registered on eBay (and will the council) as a business seller/trader! You are legally bound by all consumer and safety legislation. You do have insurance, of course? 

[myriad*seller]

There are several safety laws and regulations to consider when selling knitted baby clothes, including:

• General Product Safety Directive (GPSD)

  This directive requires that all products sold to consumers are safe under normal or reasonably foreseeable conditions of use.
• EN 14682

  This standard specifies safety requirements for children's clothing, including drawstrings and cords. It recommends that each piece of clothing be assessed for risk.
• REACH Regulation

  This regulation restricts the use of certain chemicals in apparel, including flame retardants, waterproofing chemicals, and nickel.
• EU Regulation 1007/2011

  This regulation requires that the material content of each item exported to the EU is specified.
• Intellectual property

  It is illegal to copy designs or violate intellectual property rights. 

Some other things to consider when making children's clothing include:

• Fabric: Mesh or crochet fabrics have holes that could trap fingers.
• Thread: Make sure there are no loose threads.
• Buttons: Avoid sharp buttons or buttons that look like food.
• Snaps: Some retailers insist that snaps on jersey garments are metal pronged and not plastic, and that they are not used on uneven fabric thicknesses.

[myriad*seller]

eBay won't allow you sell toys (or anything that could be considered a toy) for infants unless you ARE a business seller either (New rules that have come in regarding safety liability and complying with child safety and consumer legislation). Obviously you would need product liability insurance too, in case of any legal claims. 

Also as above, if you sell items outside the UK then you will need to comply with ALL the safety and consumer and EU import/export legislation. 

[l154_ben]

Morning 😁,
Thank you.  Yes, I do have insurance - it was a requirement when doing a village hall fete.  Even though I’ve only done a couple (a few years ago), I kept the insurance going in case I did anymore tables - it was only pennies but worth it for peace of mind. 
I think I need to make an appt with an accountant and decide from there.  I would love to take my hobby to another level but need to delve into the legalities and implications of becoming a sole trader, especially if I need to return to FT/PT work to supplement my craft habit 
Thanks once again.
Have a great weekend! 
Regards
Lisa



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[myriad*seller]

Was that Public Liability Insurance? 

You also need product liability insurance and must make sure the insurers know you are selling handmade childrens clothes otherwise you aren't covered

You don't need an accountant as a sole trader, you can do your own books, it's pretty simple and some business bank accounts offer free accounting software with a free account. I recommend Mettle for this. 

You are already a sole trader (even if you don't realise this), as you do craft fairs where you sell items you made to sell. Hence why the craft fair wanted to see your permit.

[just-in-time-4-u]

Ebay now has a strict policy of posting in delivery time frame and customer receiving it it in specified time given by not yourself but your postal provider before releasing money to you!.What does this mean to you if your are starting out as a custom made small business? A lot BIG CHANGES IN EBAY 2025 First off You are not  longer allowed to specify in your advert anything that infringes on delivery times so if your item takes more than 24 hours toake after specified time of postal delivery then eBay is definitely not the platform for you! IF YOU don't have spare capital to order your materials to custom make as built to order then eBay is not for you ! Most online business receive money from customers straight away before they proceed with building their order this idea that eBay keeps your funds from you until the customer receives their order is fantastic for the customer but quite frankly ridiculous and unworkable for a small business. I would suggest do your own website the days of small business working well with eBay is over. It's only good for hobbyists and large companies Ike Argos selling along side them My partner who had an online business that's HMRC registered has given up on eBay as it has become so inflexible due to time constraints for example if as a business you are relying on your customer to place an order then they send an item out for you to customise before returning that customised product back to them this is in complete violation of eBays new current postal time constraints all her advertising after 2025 are now flagged and taken down by ebay. Sorry for long reply but this is our experience this year