Selling from home works!

[nelletap]

I think that to 'make money from' implies over and above the costs of the hobby/activity. I asked the tax man if I needed to declare sales of my pictures and he said no - he assumed I probably spent more on materials. I assume that the same is true. If they counted it as income then you would be able to claim the costs to set against it. I'd put up the sign now!

 

[PaleoPerson]

I think that to 'make money from' implies over and above the costs of the hobby/activity. I asked the tax man if I needed to declare sales of my pictures and he said no - he assumed I probably spent more on materials. I assume that the same is true. If they counted it as income then you would be able to claim the costs to set against it. I'd put up the sign now!

I calculated the true cost per jar of honey for my first ever batch and it came out at £129.03 per 12oz jar excluding labour and fuel costs. Lucky its a hobby.

 

[Queens59]

I calculated the true cost per jar of honey for my first ever batch and it came out at £129.03 per 12oz jar excluding labour and fuel costs. Lucky its a hobby.

Hah! Yep I must be at about that too! Right so next year...a swinging sign, static one on the gate...maybe a neon bee in a tree...what do you think??

 

[Dishmop]

Buy cheaper jars...

 

[Polyanwood]

I calculated the true cost per jar of honey for my first ever batch and it came out at £129.03 per 12oz jar excluding labour and fuel costs.

My first year it was £150 a pound it cost me to produce. I enjoyed telling people who complained about paying £5 a jar that i was subsidising them to the tune of £145 a jar.

If I don't count all my losses over the past 4 or 5 years, I might break even this year!!!

 

[keithgrimes]

Chap opposite worked from home, but needed paperwork to be delivered weekly - certain neighbours threatened legal action...

good grief

 

[MuswellMetro]

I had hoped to sell at the door, but our property has a covenant which states that no business can be run from the premises, so not sure if this counts. Also, my pension rules state that as I retired on ill-health, should I make an income my pension will be stopped - does income from a hobby count?? Life is sooo confusing...

covenants are notoriusly diffucult to enforce if they are "negative" ie in the form of thou shall not and you can get them revoked as unenforcable

"positive" covenents are more enforcalble ie in the form of Thou shall use the premises as a single dwelling house


and the big "and" is that to enforce a covenant then the covenantor needs to have land adjacent or interst adjacent that will be affected if the covenant is breached

so it reall terms unless the old owner or biulder of your house is still local, then the liklehood of a negative covenant "that no business be run from the premisis" is unlikley to be enforcable in court

Pension: normal ill health retirement pension regulation allow for minor employmnet up to 8 or 16 hours a week, especialy those connect to quangos or government organsisation, i so i would check whther a selling honey produced as a theraputic hobby would breach your restrictions

 

[Queens59]

Thanks MM - I'll check the pension as soon as...The covenant is in favour of the house behind ours, an ex-farmhouse...and they are the snotty ones. It also states that we can't have livestock, chickens etc BOO! Checked with our solicitor when I wanted chickens and he felt it was unlikely to be overturned without quite a cost...so I gave in to my 20 year longing for bees instead! Figured they wouldn't class as livestock - plus they can't see where I keep my hive!

 

[Arfermo]

Property covenants

3 years ago I moved from a house built in 1938 which had covenants on it created when the land formed part of a private estate. In modern terms, the terms of the covenant were deemed likely to be unenforceable as (a) they were not reasonable (b) the covenantor was almost certainly non existant at that time when my snotty neighbour of 30 years duration raised the issue in regard to what I had wanted to do. In other words, covenants can be deemed to have lapsed in time and a sensible person can usually ignore them. Court action would likely be deemed antisocial mischiefmaking by the complainant anyway unless the transgression was so obscene as to be unacceptable even in planning terms.

 

[Queens59]

Sorry Arfermo
I'll stick with the solicitor and F-in-L's advice (ex -district commisioner Land - Reg) and not stir the wasp nest anymore than required...

 

[RoofTops]

You can take out insurance to cover the risk of a covenant being enforced. We bought a house once which was part of a small estate built on the site of an old hotel. The covenant for the land going back to when the hotel was built said only one property could be built on the site. Covenants don't lapse but the chances of anyone coming back to try and enforce it was slight so insurance cost very little and was anyway insisted on by our solicitor.

 

[Rosti]

Relections on selling from the door

Sign-up 21 Aug, sign down 31 Aug, sold out!
A learning experience, I priced at £3.50 / lb, perhaps too low?
That said, some off set to hobby costs, some good PR and hopefully some eager customers for next year. Nice people, no weirdo's, no antisocial hours knocks on the door. I have already had repeat sales and some word of mouth recommendations so there is no question about it, I will be putting the sign up again for the 2011 spring crop. All-in-all a good experience and friendly support from the local authority food safety team.

 

[Rosti]

The sign ...

 

[Onge]

Blimy!

You should sell those signs on ebay, it's seriouesly pro.

Well done.

 

[margob99]

I'm a newbie; I've learned a few things, but I'm still learning, so this is only in my humble opinion:

1. Selling at a local farmer's market, I was required to have paid for and passed a basic Food Handling course. Possible to pay for and do it all online at £25 in total. Not a bad thing to have, considering the liability issues raised in this thread ...

2. It's all very well to say your first harvest of honey cost £150 per jar, but I think about it this way:

- The hives, which are the most expensive bits, are "capital expenditure" and if you project for honey income over the next 5 years, capex can slowly be written off bit by bit over the next 5 years. Factor that in before you load all that cost onto the first year's harvest.

- Yes, ongoing hive purchases means capex continues over the next 5 years, but you learn parsimony, which means capex reduces proportionately, regardless of whether you decide to grow more hives or remain small.

3. I don't mean to be critical of knowledgeable and far more experienced beeks than me, but £3.50 per lb is way too under-priced imho. Making honey is hard work and deserves to be priced accordingly! £5 per lb is by far the minimum I would charge.

4. The way people buy is very different to how they bought in past years. Today's families like to have a range of small jars of different sweet things to eat on the shelf. They like the range, variety and selection of a little bit of honey today, perhaps jam tomorrow and maybe marmalade the day after.

Also there is a higher percentage of single people buyers, so a pound jar of honey sometimes lasts too long, doesn't get used up or granulates and gets thrown away (by ignorant consumers).

Think small jars sold in higher quantities, and you can get away with charging a small premium. I sell 8oz jars for £3 - 4 per jar (ie for £6 - £8 per lb) and have had only one single complaint about price.

Again, I may discover in the years to come that all of this is wrong, but my honey sales have outstripped anything I ever expected ....

 

[dc197]

The regulations for selling honey are reasonably relaxed for selling "at the door". They're stricter for reselling through an agent (i.e. in someone else's shop).

The BBKA have a leaflet and a PDF about it:
www . britishbee . org . uk /files/selling_honey_B10.pdf
(this funny site obscures real URLs, pfff)

Note how it says, "For direct sales like farmers markets or sales at the door Lot numbers and ‘Best before’ date are not needed."

 

[dc197]

Oh and one more thing.
Regarding the taxman, you would only have to pay VAT if you take more than (I think) £70,000. Not sure if that is profit or turnover.

As for income tax, like others have said you don't need to worry about your loss-making 'business' just yet.

 

[Hivemaker.]

As for income tax, like others have said you don't need to worry about your loss-making 'business' just yet.

Thats good then....wish someone would tell them that.

 

[margob99]

Oh and on
e more thing.
... you would only have to pay VAT if you take more than (I think) £70,000...

Hmmm, that's 14,000 x pound jars of honey at £5 each.

Say, 25 lbs of honey per super.

That's 560 supers of honey per summer.

Sorry, just had to be done!

 

[barratt_sab]

Oh and one more thing.
Regarding the taxman, you would only have to pay VAT if you take more than (I think) £70,000. Not sure if that is profit or turnover.

As for income tax, like others have said you don't need to worry about your loss-making 'business' just yet.

The 70k threshold for compulsory VAT registration is a turnover threshold. You can, if you want, register for VAT with a lower turnover.

Honey is classified as a zero rated basic foodstuff so no VAT need be charged on the sale of honey (although I bet there are some wrinkles to do with processed honey that I don't know about).

There might be an advantage for some to register for VAT, as you can reclaim the VAT you pay to your suppliers (e.g. equipment, chemicals etc).

You cannot register for VAT if you are not "in business according to the definition that HMRC uses" - and in other contexts, it's hard to be "in business" for tax purposes if you don't ever make any profit.

You cannot register for VAT if your business sells only VAT exempt goods - I think that it is key for these purposes that honey is zero rated (i.e. subject to VAT at 0%) rather than VAT exempt (i.e. not subject to VAT at all).