• TAX RETURNS COMPLETED
    TAX RETURNS COMPLETED

    Income Tax Self Assessment & Partnerships: PAYE: CIS: VAT: Corporation Tax

  •  DATA ENTRY SERVICE
    DATA ENTRY SERVICE

    Provided as part of our bookkeeping, or as a separate entity.

  • CREDIT CONTROL
    CREDIT CONTROL

    Invoicing, Statements, Debt Chasing, Litigation.

  • BOOKKEEPING
    BOOKKEEPING

    Provided on a weekly, monthly, quarterly or annual basis.

  • ALL COMMERCIAL ACCOUNTING SOFTWARE CATERED FOR.
    ALL COMMERCIAL ACCOUNTING SOFTWARE CATERED FOR.

    We are experienced with Sage, QuickBooks, Xero, Kashflow, Excel etc.

PAYE & CIS

The task of payroll processing can often divert you from your core business activity. It is our job to help and take the worry and time out of this process for you.....

Read more

Small Company Care Package

Especially designed to help start up and small companies cope with the legislative requirements and get a handle on their finances on a monthly or quarterly basis....

Read more

Ex Pat Service

Designed for British people living abroad, we take care of managing your personal filing obligations to HMRC, the obligations of your British Registered Companies...

Read more

Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login

Search Archive


Are you making money from a hobby?

Source: HM Revenue & Customs | | 08/05/2018

The 'badges of trade' tests whilst not conclusive are used by HMRC to help determine whether an activity is a proper economic / business activity or merely a money-making side line to a hobby. However, there is a point where careful consideration needs to be given to deciding whether your hobby has in fact become a taxable trading activity.

It is clear from the significant amount of case law on this subject that a decision on whether there is a business activity is often not black and white. In fact, both HMRC and the courts are clear that it is important to look at the whole picture rather than looking at each 'badge' in isolation or even relying too heavily on the badges of trade at all. In some cases, taxpayers will seek to argue that their hobby is actually a trade in order to benefit from certain tax reliefs, usually related to having a trading loss.

HMRC will consider the following nine badges of trade as part of their overall investigation as to whether a hobby is actually a trade.

  • Profit-seeking motive
  • The number of transactions
  • The nature of the asset
  • Existence of similar trading transactions or interests
  • Changes to the asset
  • The way the sale was carried out
  • The source of finance
  • Interval of time between purchase and sale
  • Method of acquisition

Planning notes:

The introduction of the trading allowance from April 2017 can help taxpayers making small amounts of money from their hobby. Even if HMRC considers that the activities in question are a trade, taxpayers can make up to £1,000 per year from their hobby using the trading allowance.

The sale of unwanted personal possessions is not considered trading (or a hobby) although there may be Capital Gains Tax implication if large profits are made.

If you are unsure of your situation - is it a hobby or a trade - we would be pleased to offer you an opinion.



Latest News

New toolkit on handling domestic abuse
15/07/2018 - More...
Public Health England (PHE) and Business in the Community have published a new toolkit to help employers support workers

Rent-a-room relief to be modified
10/07/2018 - More...
The publication of the draft Finance Bill 2018-19 includes legislation to change the way the rent-a-room relief scheme

Beneficiaries of tax exempt pension benefits to be extended
10/07/2018 - More...
The draft Finance Bill includes a new measure that will help modernise the tax treatment of employer paid premiums for