Setting up a honey business

[mbc]

filing away those invoices, and buying the sugar on its own till receipt.

If you dont need the receipt for anything else then highlighting the sugar on an ordinary receipt and keeping that is sufficient.

 

[itma]

If you dont need the receipt for anything else then highlighting the sugar on an ordinary receipt and keeping that is sufficient.

I'm sure it would be, in most cases.
But keeping "bee costs" completely apart from household expenses would make it clearer that the family weren't dipping into that sugar ...

 

[Poly Hive]

For goodness sake.

I run a Guest house and if I have a breakfast sausage for my lunch I should cost it separately?

I think the nit picking is getting a bit out of control and a dose of reality is needed.

Anyone who runs a business tries to put as much domestic expenditure as possible on to the costs and quite rightly so. Cars are run for the business, and clothing is work wear, and under the tax regime this is allowed.

The biggest improvement that HMG could make would be to double the VAT thresh hold which is pitifully low, but they constantly blame Europe for that.

PH

 

[simonrp]

Polyhive!!
No wonder the country is in such a parlour state!
How long have you been fiddling the sausages?

 

[Poly Hive]

Oh botheration exposed as a sausage fiddler... sounds terrible....

*blushes*

PH

 

[BILL.HEARD]

If you are to run a large number of colonies you need to have reliable help or a partner to help run the enterprise, everyone is subject to bouts of sickness occasionally and if this was to coincide with the middle of the swarming season it could be disastrous.

 

[ROACHMAN]

In the eyes of the tax man :

If you are selling honey to cover costs then its not classed as a business

If there is an INTENTION to make a profit it is classed as a business regardless of if a profit has been made or not.

 

[Amari]

Sounds convincing. Hope it's true!

 

[REDWOOD]

You do need to make a profit to pay tax and that's when a good accountant comes in handy

 

[alldigging]

An accountant is essential.

Mine: Keith is happy to talk through stuff with anyone setting up a business http://tips.hrbs.biz/ and has produced some free guides.


Save all receipts and make notes of all mileage etc.
I have no idea how you add in stuff like costs of washing clothing - but I'm sure there are ways.
VAT now requires you to fill in an EU Vat form too.

 

[alldigging]

If you are to run a large number of colonies you need to have reliable help or a partner to help run the enterprise, everyone is subject to bouts of sickness occasionally and if this was to coincide with the middle of the swarming season it could be disastrous.

And that reduces the tax bill (although will increase theirs if they work)

 

[dpearce4]

An accountant isn't essential, but can be good. I can emagine that the cost of an accountant really isn't worth it for someone that has less than 80hives due to their charges.

Also don't forget that if you make a loss each year you can set this against any PAYE you may pay on your main earnings. There are lots of things you can claim back like the cost of beecraft as it is technically a trade mag. Its all down to what you feel you want to claim (within the tax laws). It can all be done online.

 

[jenkinsbrynmair]

An accountant isn't essential, but can be good.

What for? zeroing in the rifle?

 

[dpearce4]

What for? zeroing in the rifle?

Knowing what some charge and how some like PWC like to prey on those that have financial hardships and going through bankruptcy then yes.

 

[clv101]

This is my first year, so I will report a significant loss (no honey to sell), which will allow me to claim back tax but next year (all being well) I will report a profit. Any tax that I get back this year will be put back into the business anyway.

It most certainly can, and should. you dont "claim" the losses as such but they can be offset against your personal tax if you also have a full time job like I do.

You do end up getting a tax rebate.

If a loss is made (likely in the 1st year) it can be offset against income from your main job and a tax rebate will be winging its way (thats what happened when I set up my gardening sideline).

They don't want you offsetting your loss-making pastime against general income -- so until it is profitable, they'd really rather not know!

This is interesting. I guess many of us have a few hives and a 'proper' job as well. Is it really the case that that ~£1000 I spent on beekeeping over the last year can be set against the income tax I pay on my job?

If this is the case, why isn't everyone doing it... for all their loss making hobby-businesses?

 

[pargyle]

This is interesting. I guess many of us have a few hives and a 'proper' job as well. Is it really the case that that ~£1000 I spent on beekeeping over the last year can be set against the income tax I pay on my job?

If this is the case, why isn't everyone doing it... for all their loss making hobby-businesses?

Having been down this road (a number of years ago) when I followed the advice of an accountant to offset a part time business loss against the tax on my main income ..... the following year I faced an Inland Revenue inquiry ! They looked at every single thing I claimed, requested receipts for every expense I had (legitimately) incurred - went through my personal bank accounts - made me account for every single deposit into them (including having to ask my mother to confirm in writing the £100 she had given me for my birthday). Even though, in those days, a lot of my sales were cash, I gave receipts for every purchase - the IR, clearly, did not believe that I had made a loss.

I ended up with an accountants bill for more than I had (at his suggestion) claimed as a tax refund and the obnoxious little git at the IR who interviewed me (accompanied by my accountant) three times - left a lasting impression that is probably best not aired here.

My advice ... run your hobby as a business separate from your personal income ... claim any capital allowances (which I think are able to be amortised over a period of three years from start up - open to correction) and retain any losses in a given year to offset against any future profits.

The IR, in my experience, hate people who offset part time business 'losses' against personal income tax - you really don't want to go there. Not worth the hassle ....

 

[farbee]

Having been down this road (a number of years ago) when I followed the advice of an accountant to offset a part time business loss against the tax on my main income ..... the following year I faced an Inland Revenue inquiry ! They looked at every single thing I claimed, requested receipts for every expense I had (legitimately) incurred - went through my personal bank accounts - made me account for every single deposit into them (including having to ask my mother to confirm in writing the £100 she had given me for my birthday). Even though, in those days, a lot of my sales were cash, I gave receipts for every purchase - the IR, clearly, did not believe that I had made a loss.

I ended up with an accountants bill for more than I had (at his suggestion) claimed as a tax refund and the obnoxious little git at the IR who interviewed me (accompanied by my accountant) three times - left a lasting impression that is probably best not aired here.

My advice ... run your hobby as a business separate from your personal income ... claim any capital allowances (which I think are able to be amortised over a period of three years from start up - open to correction) and retain any losses in a given year to offset against any future profits.

The IR, in my experience, hate people who offset part time business 'losses' against personal income tax - you really don't want to go there. Not worth the hassle ....

Hi,

Sounds a nightmare.

All that for 1 hive or did you have more hives then?

 

[pargyle]

Hi,

Sounds a nightmare.

All that for 1 hive or did you have more hives then?

No ... wasn't beekeeping - I used to buy and jewellery, part time, but the first year I didn't factor in the costs of travel sufficiently in my margins and with the costs of buying display equipment, cases, boxes, packaging etc. the first year losses were about £800 which I offset against my personal tax as a result of the accountants advice - big mistake, the final accountancy bills were over £2k and the experience was certainly a nightmare. The IR disallowed anything that they felt could be apportioned to 'personal' expense and the final tax deduction I got from claimed 'losses' was a lot less than the £800 the accountant had put in.

I felt that, even after this, the IR had a big red star against my name as I seemed to get more than my fair share of attention for a number of years. Needless to say ... all a long time ago now and just irritating memories.

 

[Hivemaker.]

I seemed to get more than my fair share of attention for a number of years.

I have known them to carry out an in depth search, which went on for eight years.

 

[pargyle]

I have known them to carry out an in depth search, which went on for eight years.

I probably got off lightly then .... although they have never done me any favours.

I finally went to the Ombudsman as a result of their overbearing 'investigations' at the time and my case was upheld - and as a result the IR were forced to give me a grovelling apology for some of the things they did ... didn't improve the tax situation and probably made a bigger rod for my back subsequently !!