These days many people have a little sideline business (casual traders) especially with the advent of online marketplaces (eBay, Amazon etc)
What people forget is that income from these “businesses” is taxable and that you should be registered with HMRC and submit Tax Returns.
In many cases the amounts involved are very small so people don’t think it is worthwhile going to the trouble.
In doing so they run the risk of falling foul of the Taxman with Tax and Penalties as a consequence.
Help is at hand.
Government are proposing to bring in Trading and Property allowances.
In essence the Government has decided it is cheaper to let people off paying a little bit of tax if it will save the administration cost of setting up tax records and processing tax returns.
The proposed allowance is £1000 to cover casual trading income.
Susie who is employed full time but makes jewellery and sells them thru craft fairs etc.
Income is a modest £900 per year.
That £900 (ignoring deductible expenses) would be taxable ordinarily but with the allowance of £1000 there is no tax to pay.
If the business starts to grow (online shop) and Income is above the £1000 per year then a decision needs to be made on the best way to “account” for the profits.