HMRC tax and beekeeping

[Father Fox]

At what point should you think about having to submit a self assessment tax return and declare honey sales?

 

[Tom Bick]

When they are knocking at the door and wanting one

 

[Erichalfbee]

When it ceases to be a hobby, it is bringing in significant income and you need to offset your costs. HMRC are not interested in hobbyists...they would be barmy to!

 

[Father Fox]

What would be considered "significant income" ?
I've heard of some ebay sellers getting into tax problems when only making a couple of hundred quid profit.

 

[midnight sun]

At what point should you think about having to submit a self assessment tax return and declare honey sales?

I thought this was discussed in thread on this forum in the not too distant past. But in any case, in order for the tax to be interested it has to be classed in their eyes as a business.
If you are a hobby beekeeper (like every single one of us on this forum...) then you are exempt at the moment.
To be a business you would have to be regularly selling produce or buying and selling produce or items. The honey crop at the end of the season that you may sell at the door would not count. If you had a stall a couple of times at the local farmer market say, then neither would that. If on the other hand you had a stall most of the time then that would be a business.
if you visit the government web site (gov.uk) there is a link to this info. and to be honest it gives you examples that are better than mine and easy to grasp.

 

[Swarm]

Well said, Tom.

 

[Grif]

If you are already self employed with another business, and so already submitting tax via self assessment, then it is probably to your advantage declaring the honey production in order to offset costs?
Any book keepers out there who are also bee keepers who can advise?

 

[theeggman]

We've only just got a honey crop that we need to sell.
KEEP all of your invoices etc. for kit/ sugar/ bees etc.
IF they descend on you, you need the ammunition to prove that you aren't producing a profit, it's just a VERY expensive hobby!!
Keep a track of the labour input, your honey is not cheap to produce.

Tim.

 

[pargyle]

There are a lot of previous threads on this subject .. some good advice if you do a search on the general forum using HMRC. One of the most informative threads is this one...

http://www.beekeepingforum.co.uk/showthread.php?t=20645

 

[Father Fox]

It seems that if you are a new beekeeper then this is the time to declare to the HMRC, you can then offset the initial capital outlay for first hives, tools, equipment etc?
Any accountants out there?

 

[user 6228]

I thought this was discussed in thread on this forum in the not too distant past. But in any case, in order for the tax to be interested it has to be classed in their eyes as a business.
If you are a hobby beekeeper (like every single one of us on this forum...) then you are exempt at the moment.
To be a business you would have to be regularly selling produce or buying and selling produce or items. The honey crop at the end of the season that you may sell at the door would not count. If you had a stall a couple of times at the local farmer market say, then neither would that. If on the other hand you had a stall most of the time then that would be a business.
if you visit the government web site (gov.uk) there is a link to this info. and to be honest it gives you examples that are better than mine and easy to grasp.

this year is going to be awkward as most will have had a bumper crop that might take a long time to sell

 

[Erichalfbee]

It seems that if you are a new beekeeper then this is the time to declare to the HMRC, you can then offset the initial capital outlay for first hives, tools, equipment etc?

Offset implies you have fewer expenses than income from honey

 

[Father Fox]

I must admit I know very little about tax, letting the people I work for sort all that out for me. Looking at the hmrc gov website it seems like a lot of faff and I'd rather not have to submit a self assessment return. Just wondered what would happen in ten or twenty years time if the taxman suddenly wanted to know if I'd declared all the income from selling honey and bees in that time.

 

[pargyle]

Offset implies you have fewer expenses than income from honey

+1 .... I'm with Tom Bick ... wait until the knock on the door and in the meantime keep records which will show you just how much money you have SPENT and how much each jar of honey has really cost you and how much you LOST every time you sold a jar ... but keep them well hidden from any significant other ....

 

[REDWOOD]

And if he does come knocking give him a free jar of honey

 

[sbisme]

How can they prove how much honey you have harvested each year??

Maybe they will interview the bees

 

[Hivemaker.]

How can they prove how much honey you have harvested each year??

They have ways if your selling it, and they love to estimate how much you owe them, and it's down to you to prove they are wrong.

 

[pargyle]

They have ways if your selling it, and they love to estimate how much you owe them, and it's down to you to prove they are wrong.

Yes ... HMRC is about the only organisation where you're assumed guilty and then have to move heaven and earth and pay through the nose to prove you are not ... and trust me... I've been there. The reality is that they will always seek out the easy targets and once you have identified yourself it's a whole lot easier for them to come looking...

 

[TOBY-3652]

When they are knocking at the door and wanting one

 

[Samurailord]

It seems that if you are a new beekeeper then this is the time to declare to the HMRC, you can then offset the initial capital outlay for first hives, tools, equipment etc?
Any accountants out there?

The only way that you will be able to claim back the costs of any start-up capital will be if you make a business from your bees from the very start.

HMRC does not want to get involved with the hobbyist (beekeeper, gardener, wood turner etc) because hobbies tend to cost money rather than make it, and they dont want to get into a situation whereby they are handing out tax rebates to all and sundry every season.

We spoke with HMRC about the tax implications of keeping bees.

Their first question was 'How many hives would you need to make a viable business from beekeeping'

My answer was 'At least thirty or so', to which i got the reply 'Talk to us when you get near thirty, then'. Another way of looking at it is if your income in any single quarter approaches £25K (the VAT registration threshold)

As has been said on other posts, the Revenue Officers are not going to be interested in a few jars of honey sold on an ad-hoc basis, but if you have a regular supply contract with a retailer and are moving large amounts then it is best to keep all your receipts, mileage reports for visits to and from any out-apiaries and suppliers, trade fairs and the like just in case they decide to pay you a visit.

From previous experience with HMRC, they will only start to show an interest in you if you are making a profit (not sales) of around £1-2K per year - it starts to make it worthwhile for them to check you out at that point.

That way you will at least be prepared and will only have to pay the correct amount of tax due (if any).

And remember, HMRC have the power to assess tax covering the previous five years (seven if they decide you should be VAT registered) so don't throw any of your saved records away until after that.

Andy