The bonus if you're selling art - but not a lot!

There's a bonus for the lots of "hobby artists" living in the UK who make money by selling their art - but n0t a lot. You may not have to pay tax on that income!

Why not check out if you're one of the lucky ones?

HMRC updated its guidance Tax-free allowances on property and trading income yesterday (6th April 2018) for the 2018-19 tax year

Here in brief are the rules:

• If your annual gross trading income is £1,000 or less, from one or more trades you may not have to tell HMRC, however there are circumstances when you must register for Self Assessment and declare your income on a tax return.
• You must keep records of this income. This is known as ‘full relief’
• ​If your annual gross trading or property income, from one or more trades or businesses is more than £1,000 you can use the tax-free allowances, instead of deducting any expenses or other allowances.
• If you use the allowances you can deduct up to £1,000, but not more than the amount of your income. This is known as ‘partial relief’.
• If your expenses are more than your income it may be beneficial to claim expenses instead of the allowances.
• Gross income means the total amount you would put on your tax return before any allowances or expenses are taken off. This applies whether you use the cash basis or traditional accounting.

However you must still KEEP PROPER RECORDS. HMRC can charge you a penalty if the records you keep aren’t accurate, complete and readable or if you don’t retain them for the required period of time.

If you use the trading or property income allowances you must keep a record of your income.
Examples of the records you may need to keep are:

• - copies of your invoices, paper or electronic
• - a spreadsheet of your income receipts
• - emails confirming income received
• - statements from the company who paid you which show the amount you received
• - bank statements
• - bank deposit pay-in records
• - a diary or appointments book showing your income from each customer

​If your income is more than £1,000

However, You must tell HMRC if you have:

• gross trading income over £1,000 - register for Self Assessment
• other gross income over £1,000 up to £2,500 - contact HMRC
• other income over £2,500 - register for Self Assessment

More about Tax

You can read more Tax Tips for Artists on my website

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