Do you have to declare an occassional sale of an item made from a hobby.

Question

My friend is hoping to take up knitting and doesnt know if she needs to declare that she sells an odd piece.

Answer 1

I don't want to get anyone in trouble but I would say no as it is occasional. If she is looking to take it up permanent then I would say she would be classed as self employed. If it was often then I would say yes. Call your local tax office and find out, don't give your NI number just say it is a general enquiry. Like I said, I would say no.  

Answer 2

As McEnroe would say - you cannot be serious!

Answer 3

Hobby income (amount over the cost of materials) IS income.

You report income on 1040 line 21, expenses on schedule A.

Answer 4

it depends on whether she is out to make a profit, if she is then yes. if not and its just to cover costs of materials, then no.

if she makes a small profit I wouldnt worry to much about it.  I doubt she would be making thousands profit so tell her to not to worry about it.

Answer 5

Technically, yes, if she makes a profit on the item over her expenses like the cost of materials.  Her time doesn't count as an expense.

Answer 6

Assuming UK -

The question is how occasional?

Quote ref trade descriptions act appeal case

"In addition an appeal court case accepted that a postman, who had placed 21 advertisements relating to 8 cars in a year, was not acting in trade, but was merely engaged in a hobby"

As cardies are not as substantial as cars then you might be able to make more, but this case relates to false trade descriptions - the tax man may have other ideas!

Sensibly, the odd one or two a month won't be of interest, but it gets to 6 a week then your are trading. If she does not need the money then charity shops will take them.