What is it?
It is for HMRC to determine whether a venture is a hobby or a trade. Initially, it is important to register as self employed and keep appropriate records of your income and all allowable expenses. HMRC will consider the income against the UK personal tax allowance and the National Insurance limits. HMRC don’t know that you fall above or below the remit until you register your business and complete tax returns.
Useful links
Case Study
Background
This is one example of many cases that has come our way - our client feels they are just enjoying a hobby and barely making money when they consider their time and any materials.
Action
We submitted the required figures which were under the threshold for tax and national insurance. .
Conclusion
Whilst there was a penalty due to failure to notify, there were no other charges