Mens group tax implications

[monkeechops]

Hi, I help to run a local mens group where men can meet to offload any problems they have, to chat and to socialise amongst each other. We are not a registered charity and we have a bank account set up with a small balance. We would like to sell some merchandise, hoodies, mugs etc with our branded group name on to help raise our bank balance. The money that we will hold in our account would eventually be used for the men in the group, for example to take them on a day out somewhere or a meal out, that kind of thing. We would like to sell our merch within the group and hopefully to non-members of the group, members of the public.
I would like to know what tax implications we need to consider doing this, and is there any point due to the low numbers of items we would sell? Additionally being a 'lehman', if there is tax to pay how do we go about paying it i.e. are there specific forms to pay or do we need to seek an accountant, whose fees would wipe out our small profit?


Thanks ever so much in advance, monkeechops

[pawncob]

Sales to other members would be mutual trading, with no tax liability.
Sale to non members may result in a profit (taxable), but probably under the trading allowance exemption.(£1000.00)
You don't need to report this to HMRC where the exemption applies.

[someone]

You don't need to report this to HMRC where the exemption applies.

Which, of course, will need a qualification from next year,

"Unless you're in MTD".

HMRC have designed the most awesome system that literally prevents you declaring taxable income. So if you're in MTD for property income and have a small side hustle that comes under the 1000 limits, they have to require you to submit the quarterly stuff for the side hustle because otherwise if it goes over 1000 you cannot declare it and pay the tax.

Of course, in practice, the "easy" solution is just to have problems adding up and magically discover that your income never exceeds 1000, although that's likely to suffer from "creep" in some cases, 1050 this year, 1200 next year, 2000 the next year, 3000 the next year. Before long the fear of HMRC fining for all of the under-declared years means that you'll never come clean...

Such incompetence. A lesser organisation would be incapable of it.

[Lambs]

Dear All,

Would this not fall under Corporation Tax, as a club or association? In which case, Making Tax Digital and/or the Trading Allowance are red herrings, no?

Regards,

Lambs

[someone]

Possibly, yes, but the blanket "if it's under 1000 you don't need to report it to HMRC" will no longer be true.

[someone]

Possibly, yes, but the blanket "if it's under 1000 you don't need to report it to HMRC" will no longer be true.

Let me rephrase that:

You don't need to report this to HMRC where the exemption applies [unless you're in MTD].

is what I was trying to say. I think both pawncob's statement and my amendment are accurate representations of the current state of affairs.

[Lambs]

Clubs and associations are typically subject to Corporation Tax, not to Income Tax.

Therefore, neither MTD, nor the £1,000 Trading Allowance, will apply to its typical income streams.

From memory - and it is probably a decade or more since I last looked at this - there is a £100 soft "exemption" on such clubs' deposit interest income. Hence small members' clubs with limited funds need not trouble HMRC if their "income" is mostly members' fees, while its funds on deposit generate (say) £13.74 in bank interest.

I concur with P's broad sentiment about "mutual trading", and financial interactions with members typically being non-taxable, although I think HMRC believes that, strictly, "mutual trading" is a little different - more like the Co-Op than subscriptions.

Regards,

Lambs

[pawncob]

My comments assumed that Monkeechops would keep it simple and take it upon himself to "run" the "business".