Beekeeping finances - bank/savings account?

[Tdod]

If the income was trivial the inspector may consider the activity as trivial also, but I would not rely on that presumption. They are a special breed of person.
If they call and see you have a sign out 'honey for sale' you are advertising for sale a product, even a modest two hives could generate substantial 'income' enough for them to be interested in your activity at least.
It would then be for YOU to provide the paperwork to show conclusively that the sales did not generate a 'profit' if you do not have the paperwork then they could decide that it was all profit. Then they may start asking how many years you had been doing it!
Remember also that your record of hive numbers can be taken from such databases as the beebase and the time they have been registered. If your figures differ from the available data again it will be for YOU to prove the correctness of the information.
Food for thought perhaps?

TheTax man or woman has a job to do just like the rest of us

 

[VEG]

are you a tax person Tdod lol

 

[jenkinsbrynmair]

TheTax man or woman has a job to do just like the rest of us

Yes, but when some of the ones i have had the misfortune to work with sit there with a smug smirk and expound that they enjoy seeing the misery they can inflict on an individual and volunteer to sit in on interviews of colleagues in disciplinary cases for the same reason it does make me think............

 

[Tdod]

No I am not but as an owner of my own company I submit my accounts every year to the inland revenue and have to pay what is due. If you earn more than your individual allowance No matter how you earn it you pay tax on it..

Trust me I pay my acountant a lot to sort it all for me lol

 

[Gilberdyke John]

No I am not but as an owner of my own company I submit my accounts every year to the inland revenue and have to pay what is due. If you earn more than your individual allowance No matter how you earn it you pay tax on it..

Trust me I pay my acountant a lot to sort it all for me lol

Probably the wisest move. A good accountant is worth far more than he or she may charge you.

 

[MandF]

TheTax man or woman has a job to do just like the rest of us

Yes, but there are limited tax inspectors, and lots of things to inspect.

Just like in law, if a precedent exists it is used, to avoid unnecessary debate and court time, HMRC will have a shortcut test to decide whether someone is worth inspecting. In beekeeping terms that means if they can be considered commercial beekeepers. That means significantly more than a few hives.

Of course, if someone has a thriving rolled beeswax candle 'business' on ebay, they could be inspected. But they are simply not going to waste their time inspecting beekeepers with a few hives, to see if their hobby constitutes a commercial activity. There are thousands of businesses on ebay they could target first, for a start, if they had a bit of time on their hands.

 

[MandF]

No I am not but as an owner of my own company I submit my accounts every year to the inland revenue and have to pay what is due. If you earn more than your individual allowance No matter how you earn it you pay tax on it..

Trust me I pay my acountant a lot to sort it all for me lol

No you dont.

You CAN make a profit from a hobby and it not be taxable. FACT.

If you consistently make a (significant) profit, then yes, but this is a hobby and HMRC have rules and tests specifically for hobbies.

If you got inspected and it was shown you SET OUT to make a profit, then you would have to pay the tax on those profits, otherwise if you have a few hives and sell honey, it is a hobby, and income is not taxable. Precisely because it would be virtually impossible for them to prove a beekeeper could possibly make a commercial profit from keeping bees with only a few hives.

If they could, they would.

Why, do you think, that the BFA have a stipulation of 40 hives to become a member? How did they come to that figure?

 

[iand]

If you consistently make a (significant) profit, then yes, but this is a hobby and HMRC have rules and tests specifically for hobbies.

If the boot was on the other foot and you made a loss then you could set that against your other income, and claim a bit back. I don't think HMRC really want to get into subsidising peoples hobbies.
Where would it end, even a guy with a big yacht couldn't get it classified as a business to set against tax, even though it spent time out on charter. HMRC didn't want to subsidise his 'hobby'.
Just need to be careful, if you think you are a bit near the boundary then talk to an accountant.

 

[Hivemaker.]

Why, do you think, that the BFA have a stipulation of 40 hives to become a member? How did they come to that figure?

I think that may be twenty hives now.

 

[jenkinsbrynmair]

I think that may be twenty hives now.

Yes, i believe they are thinking of renaming themselves the Bee Smallholder's Association

 

[Dishmop]

As opposed to now, where I take the cash out of the tin and put it in my wallet.

Save time and effort and leave out the tin..

 

[Dishmop]

I have consistently made a loss farming ever since I can remember.

All my profits go on running the Bentley which is needed for trips to B&Q to buy ply for hives....

 

[Philip]

M&F

yes it is possible, but if you answer the following questions you might have some difficulty convincing mr taxman that your hobby was not generating income as defined for the purposes of them claiming inc /tax and NI [were it is due]

http://www.hmrc.gov.uk/guidance/selling/badges.htm

2 yes
3 yes
4 as in 'part of a pattern that suggests trading'
5 packaging improves the ability to sell the honey
6 labelling requirements could be construed 'goods sold in a way that indicates trading.

even for two hives over time, some considerable income 'could' be raised just from selling honey. not an unreasonable number for a hobby. Then there would be the penalties and interest for not declaring etc etc etc.


Too small to care about you? They love people who think like that, Mr taxman lives in their own reality.

Of course it’s not a simple as I have indicated you do have to within the thresholds on income, but if you have a part time job they can be breached.
Even if you are not due tax, failure to notify your activity alone could result in penalties.

Claiming you 'thought it was income from a hobby will not wash, well not in their reality. it goes something like...

'I see, you say you don’t have any proper paperwork or records... errrm tell you what we think you gained 2k pa in income so with interest and penalties for six years.... yes of course we take a cheque, just make it out to HMRC, bye... see you next year'

I am sorry and don’t wish to be rude but you show a great deal of naivety with

HMRC will have a shortcut test to decide whether someone is worth inspecting. In beekeeping terms that means if they can be considered commercial beekeepers. That means significantly more than a few hives

furthermore I don't see the use of the word 'significant' in their tests, I would also avoid the use of the word 'profit'

Dishmop
hope you are keeping mileage records for all the trips, both private and business [sorry hobby] use. if not you are not be able to claim a penny... you have well done... opps it would seem that your MOT records show a different mileage to your records... errrm could you explain that sir...

 

[MandF]

I think that may be twenty hives now.

I read that too, that you could join with 20 hives, but you had to have the 40 within a certain (short) time period.

I just tried to find where I read it, but cannot - maybe an existing member on here can confirm that the requirement to be a member is still 40 hives but that you can join with an initial 20 hives as long as you are expanding to 40?

 

[MandF]

M&F

yes it is possible, but if you answer the following questions you might have some difficulty convincing mr taxman that your hobby was not generating income as defined for the purposes of them claiming inc /tax and NI [were it is due]

http://www.hmrc.gov.uk/guidance/selling/badges.htm

2 yes
3 yes
4 as in 'part of a pattern that suggests trading'
5 packaging improves the ability to sell the honey
6 labelling requirements could be construed 'goods sold in a way that indicates trading.

even for two hives over time, some considerable income 'could' be raised just from selling honey. not an unreasonable number for a hobby. Then there would be the penalties and interest for not declaring etc etc etc.


Too small to care about you? They love people who think like that, Mr taxman lives in their own reality.

Of course it’s not a simple as I have indicated you do have to within the thresholds on income, but if you have a part time job they can be breached.
Even if you are not due tax, failure to notify your activity alone could result in penalties.

Claiming you 'thought it was income from a hobby will not wash, well not in their reality. it goes something like...

'I see, you say you don’t have any proper paperwork or records... errrm tell you what we think you gained 2k pa in income so with interest and penalties for six years.... yes of course we take a cheque, just make it out to HMRC, bye... see you next year'

I am sorry and don’t wish to be rude but you show a great deal of naivety with

furthermore I don't see the use of the word 'significant' in their tests, I would also avoid the use of the word 'profit'

No, you didnt see "significant" in their tests or on their website, those were my words, but you did see "lacks commerciality", "does not set out to make a profit", "occasional sales are a by-product of the hobby".

My hobby is to manage and raise 2 colonies of bees, because I (mostly) enjoy the art, enjoy the science, and when I do sell honey I get a lot of satisfaction that other 'normal' people appreciate local honey.

This discussion is a bit like the keeping bees in a garden and being under threat of prosecution if your bees sting someone else discussion. Plenty of theory, no actual evidence of it actually happening.

People assume the tax man *might* be interested in a beekeeper who keeps a few hives. They are not. Beekeepers and HMRC have been in coexistance for some time now, so perhaps someone can point us to some case law where a beekeeper (primarily selling their own honey) with less than 40 hives has been prosecuted and/or fined by HMRC?

Or even anecdotally from all the experienced beekeepers on here?

Or even generally for any 'hobby' which involves livestock?

I did a google and found this discussion on a cat breeder's forum, one might say there is a lot less artistic/scientific/hobbyist merit in breeding cats than beekeeping, but still the discussion is interesting and remarkably similar. It does also reference a previous hmrc inspection of a cat breeder, which failed. And it mirrors the other point made on here that if it is taxable, then we could all offset our personal tax from the losses we make.

http://www.petforums.co.uk/cat-breeding/202192-hobby-breeding-tax.html

Actually, given the ongoing issues with insect pollinators, perhaps it is about time that we were given grants to keep bees

 

[Philip]

well I wish you luck with your Hobby...

I hope they never come knocking on your door, all though should they, you will find out first hand the lengths they will go to to show you the error of your thinking. good luck

just had a scan of the link.

"If you are a "Hobby Breeder" then you may not need to file a Self Assessment. However, the definition of "Hobby Breeder" is NOT clear cut, and there are no 'official
HMRC' guidelines stating this definition.

Therefore anyone taking money/income for a litter should contact HMRC to ask for advice on their individual case, as the technician will go through all your personal details and give you advice pertaining to your situation.

As an Accountant my advice would be to check your own personal tax situation, and not rely on the outcome of other people situations or the outcome of cases on the internet. You should contact the revenue yourself and go through all your details with them, and ensure you get a reference number for your call. Then, should anything be queried in years to come you have a reference number that logs your question to them, so you will not be penalised.

Remember, the 6 year rule does not apply if HMRC thinks there has been a non-payment of tax."

Still... go with what you think is best.

 

[Dishmop]

Dishmop
hope you are keeping mileage records for all the trips, both private and business [sorry hobby] use. if not you are not be able to claim a penny... you have well done... opps it would seem that your MOT records show a different mileage to your records... errrm could you explain that sir.

Its the garage people who use it for testing when it goes in for those very expensive repairs...

 

[Philip]

@dishmop

Like it... I will have to try and remember that one...

 

[MandF]

Selective scan reading?

"I believe an over enthusiastic tax man tried to target cat breeders some years ago ................. and gave up because they'd be paying us."

I really couldnt care less if HMRC came knocking on my door, 5 mins doing the maths on the cost of the equipment I have and my honey yields would mean it was a quick cup of tea and on to their next target.

There are 2 points here. First is that I dont think they would bother doing it (again, anyone on here been inspected, or know someone who has?), and second, which is probably more pertinent, it wouldnt matter if they did because I dont think it is possible to make a profit without the necessary economies of scale.

If they did turn up and decide it was a commercial operation, then like most of us I think, I would be quids in as I could offset all my losses against my paye from my actual job. I like the idea of the state funding my hobby.

 

[drstitson]

"Well, its not a business, its a hobby, according to HMRC!"

i'd imagine that having a business account specifically for the hobby would start to prick the interest of HMRC.