The Taxman

[notaeab]

It is friendly actually. Put it down to the weather. The question of tax depends upon your own tax situation. If you are selling honey as a business then tax is probably due and you will need to sort that out with HMRC yourself. If you are a hobby beekeeper, like most of us, and only have a few hives and sell honey from the door or to friends etc., the probability is that you will have spent more on equipment (for which you get no tax credit) than you will get from selling a few lbs of honey and will there fore be substantially out of pocket for some years. Then there is the question of losses of bee colonies and queens that die and have to be replaced from UK sellers etc that often occur. HMRC will have no sympathy on that score either. Suggest you just don't ask about it and best of luck.

Yeh just found out unless your a registared business you have to declare all sales as nothing can be set against earnings !!!!

 

[pargyle]

are you a registared business? if not then all sales are declarable

That's rubbish ...

There are dispensations for hobbyists who sell their produce 'farm gate sales' as they are termed - what you need to be careful of is where the dividing line between a hobby and a business lies.

I would suggest that there are very few hobby beekeepers who need to consider registering as either a sole trader or a limited company - there are onerous responsibilities attached to becoming a commercial beekeeper (or business of any type) - the hassle factor more than outweighs any small advantages. When you have a lot of hives and are at the point where you could be construed as substantially incrementing any other income you may have then that is the time to consider legitimising your beekeeping into a business - not before.

HM is correct however ... you need to keep records that show your costs and your sales - the difference between your sales and your costs is either a profit or a loss and it is this that which HMRC etc. will be interested in.

It has nothing whatsoever to do with whether you are a registered business.

 

[Erichalfbee]

Yes, that would work well to avoid having to pay any tax on any honey sold, tipping away any surplus left after feeding would be best, as this would avoid so much lifting, and leave room for the bees to collect more honey to tip away.

OR
You could run Flow Hives and leave the tap running.

 

[alldigging]

Yeh just found out unless your a registared business you have to declare all sales as nothing can be set against earnings !!!!

If you are a self-employed then you can write down ALL your expenses and all your income and do the maths required to produce the number that is your profit.

You should if in any doubt seek your own advice from HMRC about whether you should register or not.

It is likely you will spend more on kit than you will ever make in honey. Because you will keep buying kit.

 

[notaeab]

That's rubbish ...

There are dispensations for hobbyists who sell their produce 'farm gate sales' as they are termed - what you need to be careful of is where the dividing line between a hobby and a business lies.

I would suggest that there are very few hobby beekeepers who need to consider registering as either a sole trader or a limited company - there are onerous responsibilities attached to becoming a commercial beekeeper (or business of any type) - the hassle factor more than outweighs any small advantages. When you have a lot of hives and are at the point where you could be construed as substantially incrementing any other income you may have then that is the time to consider legitimising your beekeeping into a business - not before.

HM is correct however ... you need to keep records that show your costs and your sales - the difference between your sales and your costs is either a profit or a loss and it is this that which HMRC etc. will be interested in.

It has nothing whatsoever to do with whether you are a registered business.

You are right and wrong if you work and pay tax ANY ANY other income needs to be declared and you CANNOT off set costs ie hives etc against income UNLESS a registared business

 

[Erichalfbee]

From HMRC

BIM20090 - Meaning of trade: general: hobbies and artificial trades
You should be consistent in your approach to transactions that may be trading transactions, irrespective of whether they lead to a profit or a loss. However, you should examine critically claims that a trade exists where that claim may have been made to get relief:
• that is only available to traders, such as loss relief, or
• for the costs of a hobby,

VBNB27000 - VAT Business and Non-Business activities: hobbies

People sometimes have hobbies that involve the making of taxable supplies, for example repairing cars or selling stamps. These supplies are not automatically made in the course or furtherance of business. You should apply the business test.
It is unlikely that hobbies which involve a registered person making minimal supplies are business. However, in some cases the person’s hobby can lead them to make substantial supplies and may grow to become a business activity. Many successful businesses grow out of a hobby or private interest.
When judging whether a hobby should be seen as a business activity you should consider whether the activity is taxable for income tax purposes. The Income Tax (Trading and Other Income) Act 2005, Part 2, Chapter 2, Section 5 states that:
Income tax is charged on the profits of a trade, profession or vocation.

 

[notaeab]

From HMRC

BIM20090 - Meaning of trade: general: hobbies and artificial trades
You should be consistent in your approach to transactions that may be trading transactions, irrespective of whether they lead to a profit or a loss. However, you should examine critically claims that a trade exists where that claim may have been made to get relief:
• that is only available to traders, such as loss relief, or
• for the costs of a hobby,

VBNB27000 - VAT Business and Non-Business activities: hobbies

People sometimes have hobbies that involve the making of taxable supplies, for example repairing cars or selling stamps. These supplies are not automatically made in the course or furtherance of business. You should apply the business test.
It is unlikely that hobbies which involve a registered person making minimal supplies are business. However, in some cases the person’s hobby can lead them to make substantial supplies and may grow to become a business activity. Many successful businesses grow out of a hobby or private interest.
When judging whether a hobby should be seen as a business activity you should consider whether the activity is taxable for income tax purposes. The Income Tax (Trading and Other Income) Act 2005, Part 2, Chapter 2, Section 5 states that:
Income tax is charged on the profits of a trade, profession or vocation.

so now the question is when is it deemed a business how much can you get away with ?

 

[Erichalfbee]

When you make a profit?

 

[notaeab]

When you make a profit?

it does not read that way UNLESS registared all all all sales are "profit" so are all delarable so unless i break the law need to declare all honey sales

 

[itma]

Please could someone help me i want to sell honey i have left over and next year hope to get more how much do i need to declare to the HMRC ?

What have your hives, bees, frames, foundation, extraction, jars, labels, training, travel for training, membership/insurances, winter feed, etc etc actually cost you?

Until you sell that much honey, the matter of tax does not arise.


First make your profit. (And it doesn't sound like you are anywhere remotely near that.)

Then pay tax on the profit you have made.

Simple.

As long as your beekeeping is a hobby, that really is just about it.
But if you are trying to claim that it is your trade, then hire an accountant, and declare everything he tells you to.


Failure to comprehend something as simple as this would have to be deliberate.
And in case it is deliberate, my troll-feeeding stops right here.

 

[Erichalfbee]

it does not read that way UNLESS registared all all all sales are "profit" so are all delarable so unless i break the law need to declare all honey sales

You can offer yourself as a sacrificial lamb (beekeeper) and report what happens?

 

[B+.]

Many years ago, people told me they wouldn't do overtime because they would be paying more tax than the income they received. That was again the daftest reason imaginable as it completely ignored the fact that the tax man takes only a proportion of the additional income - currently 20% for basis rate taxpayers and a max of 40% on the higher rate - meaning one keeps a minimum of 60% of the extra income. The tax man certainly does not take the whole lot plus some as some believe. Cutting ones own throat readily comes to mind. In your case you will be selfishly cornering the local market at a price way below the going rate for a premium product. Shame on you.

Perhaps, what they meant was that the increase in wealth that the overtime would have generated was insufficient to motivate them to incur the effort. There is a concept in financial strategy called "utility" where, once the basic needs are met, people aren't motivated by money. They would rather enjoy the leisure time instead.

The maximum is actually 45% (reduced from 50 for those having taxable incomes over £150,000).

 

[Hivemaker.]

In your case you will be selfishly cornering the local market at a price way below the going rate for a premium product. Shame on you.

I don't sell any of it locally, most of it goes up round your way.

 

[B+.]

If you are a self-employed then you can write down ALL your expenses and all your income and do the maths required to produce the number that is your profit.

For a self-employed person, expenses are only allowed for tax if they are "wholly" and "exclusively" incurred for the business. I have seen accounts where a self-employed person put personal expenses through their business account. These are disallowed for tax.

 

[Hivemaker.]

For a self-employed person, expenses are only allowed for tax if they are "wholly" and "exclusively" incurred for the business. I have seen accounts where a self-employed person put personal expenses through their business account. These are disallowed for tax.

Not even a few spoonfuls of the bees sugar for my tea

 

[For want of a better word]

When I put in my time, equipment deterioration, electricity, cleaning expenses, insurance, I think my tax will be zero....And £5 per lb is my price. CASH!

My word that IS cheap!

When I costed out the price of honey a couple of years ago taking 10 productive colonies as the standard, by the time the cost of purchasing hives and all the paraphernalia associated with extraction, feeding treating and general faffing most hobby beekeepreres do... and the expence of bottles lids labels and the cost of borrowing capitol to carry out said honey production.....

it worked out at £3 80 for a half pound jar.

I give mine away at £4.80 a 1/2 lb.... and get it!

and the cost of running a vehicle/fuel/tyres/tax/insurance/oil/windscreen wash was not added!

Yeghes da

 

[pargyle]

Failure to comprehend something as simple as this would have to be deliberate.
And in case it is deliberate, my troll-feeeding stops right here.

+1 ... Either totally dim or deliberately obtuse ...

 

[Tim1606]

What have your hives, bees, frames, foundation, extraction, jars, labels, training, travel for training, membership/insurances, winter feed, etc etc actually cost you?

Until you sell that much honey, the matter of tax does not arise.


First make your profit. (And it doesn't sound like you are anywhere remotely near that.)

Then pay tax on the profit you have made.

Simple.

As long as your beekeeping is a hobby, that really is just about it.
But if you are trying to claim that it is your trade, then hire an accountant, and declare everything he tells you to.


Failure to comprehend something as simple as this would have to be deliberate.
And in case it is deliberate, my troll-feeeding stops right here.

My bees are my business and i have an accountant, registered with HMRC, registered with Environmental health, and some years do not make a profit but the accountant still fills in a tax return on my behalf because she was advised by HMRC that as soon as i started selling to shops it became a business, and at which point i can start off setting costs of purchases against my sales. Before this as a hobby i was not able to.

I know from a friend who does crafts as a 'hobby' and sells them, and has told me that HMRC are clamping down and viewing facebook, twitter, pinterest and forums etc. so for those who are selling beware.

 

[Hivemaker.]

I know from a friend who does crafts as a 'hobby' and sells them, and has told me that HMRC are clamping down and viewing facebook, twitter, pinterest and forums etc. so for those who are selling beware.

My accountant said much the same, mainly about e bay.

 

[dpearce4]

Perhaps, what they meant was that the increase in wealth that the overtime would have generated was insufficient to motivate them to incur the effort. There is a concept in financial strategy called "utility" where, once the basic needs are met, people aren't motivated by money. They would rather enjoy the leisure time instead.

The maximum is actually 45% (reduced from 50 for those having taxable incomes over £150,000).

Don't forget you also pay NI as well at what ever rate that is now 12% up to £805 per week then 2% above that. so that would work out at 57% tax at that highest rate. in my mind sod working for that.