Could you turn your hobby into a successful business?

Musical types buy and sell vinyl, write songs or make instruments. Arty types paint, take photographs or make ceramic pots. Sporty types cycle, go fishing or canoeing. Some write stories or poetry, while many others knit or sew, bake cakes, make jam or grow plants. 

Most of us have hobbies. They make life more enjoyable because they’re fun and they can benefit our physical and mental health. But for some, they can also generate a welcome few extra quid.

Can I turn my hobby into a business?

Research carried out by insurer Hiscox in 2022 suggested that 23% of sole traders had turned their hobby into a business. Many people now run “side-hustle” businesses, often selling on such platforms as eBay, Etsy and Amazon after turning their hobbies into lucrative cash-spinners. 

But not everyone has what it takes to run a successful business, no matter how much they love doing something. And sometimes a hobby is best suited to a spare-time business. However, hobbies can be turned into successful full-time businesses, enabling people to jack in their jobs and earn a living from their hobby or passion. 

A less risky option might be to launch as a spare-time hobby business, and see how it goes before deciding whether to launch full time. Caution is also advised, because doing something for money can be a lot different to doing it purely because you love it.     

Caution is also advised, because doing something for money can be a lot different to doing it purely because you love it.     

How much can I earn from my hobby before paying tax?

UK tax authority HMRC allows you to earn up to £1,000 of tax-free income from a hobby business. This is called your Trading Allowance. So, if you’re earning less than that a year, you won’t have to register your hobby business or pay any tax. But if you earn taxable income of more than £1,000 in a tax year (6 April to 5 April), you’ll need to register so that you can pay tax.

If you earn money from more than one hobby, the total taxable income from them all cannot be more than £1,000, if you want to avoid having to register and pay tax on your income.

How do I register my hobby business for tax?  

• Most people who need to report hobby business income to HMRC register as a “sole trader”, which is basically where you run your own self-employed business. 

• As a sole trader, in law, you and your business are the same thing, so you’re personally liable for business debts. To avoid this, you can set up a limited company, but that requires more tax admin and cost.

• If you haven’t done it before, you must register for Self Assessment before 5 October in your business’s second tax year (6 April until 5 April), otherwise HMRC can fine you. 

• Visit government website GOV.UK to register for Self Assessment.

If you haven’t done it before, you must register for Self Assessment before 5 October in your business’s second tax year (6 April until 5 April), otherwise HMRC can fine you. 

How much tax will I pay on my hobby business income?

Once your hobby business trading income goes over £1,000, if you’re earning more than the Personal Allowance (£12,570 in the 2022/23 tax year), you pay Income Tax on your “net profits” (ie total sales minus allowable tax expenses), with tax allowances also accounted for.

The amount of tax you pay is determined by the Income Tax band your taxable income falls into. Your taxable income can include income you earn from other sources (eg share dividend payments, rental income, pension payments, etc). 

• You’ll pay the 20% basic rate of Income Tax if your annual total taxable income is £12,571-£50,270.

• You’ll pay the 40% higher rate of Income Tax if your annual total taxable income is £50,271-£125,140.

• You’ll pay the 45% additional rate of Income Tax if your annual total taxable income is more than £125,140 (2023/24 for all figures; Income Tax bands and rates are different in Scotland).

Do I pay National Insurance on hobby business income?

• If your hobby business income is more than £12,570 a year, Class 2 National Insurance contributions (NICs) of £3.45 a week are payable. If it’s £6,725-£12,570, you don’t need to pay Class 2 NICs, but you still receive the benefits that come from paying them. 

• Class 4 NICs of 9% are payable on profits of £12,570-£50,270, with 2% payable on profits above £50,270.

What tax expenses can my hobby business claim?

To reduce your tax bill, potentially, there are many tax expenses that your hobby business can claim, including:

• machinery and equipment

• stock or raw materials 

• packaging and print

• broadband and phone

• travel (ie fuel, parking, train or bus fares)

• premises (ie rent, heating, lighting, business rates, etc)

• postage and office stationery 

• marketing and advertising costs 

• bank charges, insurance

• professional membership fees

• wages and professional fees paid to others 

• safety clothes and business-branded workwear.

If you run your hobby business from your home, you’ll probably be able to claim for some of your heating, electricity and water costs, Council Tax, mortgage interest or rent, broadband and telephone use. Alternatively, you may be able to claim a flat rate.

You can only claim for genuine business costs. There can be severe consequences if you conceal taxable hobby business income or make fraudulent expenses claims. If you use something for business and personal reasons (a mobile phone being a classic example), you can only claim business use costs as an allowable tax expense.

There can be severe consequences if you conceal taxable hobby business income or make fraudulent expenses claims. If you use something for business and personal reasons, you can only claim business use costs as an allowable tax expense.

Will my hobby business need to register for VAT?

• If your sales that were subject to VAT in the past 12 months were more than £85,000 (the VAT threshold for 2023/24) or you expect them to be more than £85,000 in the next 30 days, you must register for VAT. That is more likely if your hobby business is full time and very successful. You register for VAT via government website GOV.UK.

Will my hobby business need to keep tax records? 

If you need to register your hobby business and pay tax, you must maintain accurate, up-to-date records of your sales and costs, with exact figures and dates, so that you can complete your Self Assessment tax return and evidence your income and costs should HMRC ask you. HMRC can fine you if your records are not accurate, complete and legible. Also keep receipts and invoices for things you claim as tax expenses. 

How do I report my hobby business income to HMRC?  

You complete a Self Assessment tax return each year, the main SA100 tax return and the SA103 supplementary page, summarising your hobby business income, as well as all expenses and allowances you claim. 

You can file your Self tax return any time after the tax year finishes on 5 April, although the annual deadline for filing your Self Assessment tax return online is midnight on 31 January. A £100 fine is payable immediately if you miss the filing deadline. 

After HMRC receives your tax return, it will tell you how much tax you owe. The deadlines for paying your tax bill are usually: 31 January for any tax you owe for the previous tax year (known as a “balancing payment”) and your first “payment on account”; then 31 July for your second payment on account.

• This blog was produced for GoSimpleTax, award-winning software that makes completing a Self Assessment tax return much easier, quicker and cheaper when compared to using an accountant.

Eight ways to ensure that small businesses actually read your content

Many small-business content writers have never worked for a small business, let alone started and run one. Some make assumptions about small businesses and their owners that just aren’t true in some or all cases.

Common examples? Well, very few small-business owners are entrepreneurs and most don’t think of themselves as such. They’re happy to be a small-business owner with modest ambitions and there’s nothing wrong with that, of course.

Yet many small-business content writers persist with using the word “entrepreneur” as a catch-all term. They believe that everyone who runs a small business is “entrepreneurial”, which is why their content often fails to engage. Put the word entrepreneur in your title/headline and many small-business owners won’t realise that you’re trying to reach them.

“Put the word entrepreneur in your title/headline and many small-business owners won’t realise that you’re trying to reach them”

Know your audience 

SME (ie small and medium-sized enterprise) is another term that’s overused or often poorly chosen (as in “Start your own SME in your garden shed”). Medium-sized enterprises have 50-250 employees (too many for a garden shed), while small businesses have up to 50 (you’d still need a massive garden shed). 

Most (96%) of the UK’s estimated 5.9m small businesses are micro-enterprises (ie up to 9 employees), more specifically they’re “sole proprietorships”, which is a sole-trader business run by one self-employed person. Some 4.5m UK businesses (about 75% of the total) have no employees other than the owner. Many of them won’t be interested in HR content. 

Although other small firms together employ some 13.2m people, don’t assume that all small businesses have an HR director/department (a common mistake). Often, that’s just one of the many “hats” the small business owner must wear.

“Despite the impression held or given by many small-business content writers, not all small firms are office based”

Reality check  

Crucially, despite the impression held or given by many small-business content writers, not all small firms are office based. Three-quarters of all UK businesses operate in services industries and many don’t operate from office premises. About a fifth of UK small businesses are construction-sector firms, while 9% operate in the wholesale and retail trade and repair sectors. 

Women own/lead only a third of all UK small businesses, but numbers have grown considerably in the past five years (the figure used to be 17%). Just 5% of UK SMEs are “minority ethnic group led”, according to government figures, and this percentage hasn’t increased in the past five years, sadly. While some report the average UK business owner age as 40, others put it closer to 50, although many more young people are starting their own business. 

Hopefully, if necessary, you’ve learned a bit more about your audience/target customer, but carrying out basic research can help you to learn much more. Going out there and visiting small businesses to find out about them and their key challenges could significantly improve your small business content, but what else can you do to boost your success?

“If you can provide real-world advice that enables small-business owners to save time and get more done quicker, you’ll stand a better chance of getting them to ‘know, like and trust’ your brand”  

1 Save small-business owners time

Running your own small business is very demanding, with many things competing for your attention each day. The work can be hard and the hours very long, too, with time probably the most precious commodity for most small-business owners (especially those with family commitments). But that gives you an opportunity. 

If your content can provide real-world advice that enables small-business owners to save time and get more done quicker, you’ll stand a much better chance of getting them to “know, like and trust” your brand, which can mean they soon go on to become loyal customers. 

2 Save small-business owners money

Margins and budgets are always tight for most UK small businesses. Keeping your cash flow positive is a struggle, but with prices across the board rising – significantly in some cases – if your content promises to save business owners money, they’re more likely to read it. Don’t insult their intelligence with obvious suggestions (eg “turn off lights when you’re not using them”); find ideas that small-business owners may not have considered. 

“The supposed productivity-boosting power of potted plants in an office might seem fascinating to you, but many other things are more important to your average small-business owner”

3 Write about things that really matter to small firms

Show empathy. Your content should prove that you’re in tune with the everyday challenges, concerns and realities of small businesses all over the country. The supposed productivity-boosting power of potted plants in an office might seem fascinating to you, but so many other things are much more important to your average small-business owner (who may not even have an office). They just don’t have any time to waste, so, focus on the important stuff, get to the point and provide value. 

4 Make small-business owners’ lives easier

Running a small business can be difficult and there are many challenges to overcome, especially when it comes to legislation. If you can offer advice that takes the hard work and hassle out of decisions, tasks and obstacles, readers will appreciate the value of your words. Help to solve their problems. Provide small-business content that gives real-world solutions. Make complex things easier to understand and manage.

“Good small-business content provides a clear, understandable explanation, no matter how complex the information or topic” 

5 Help small-business owners to make more sales

Ultimately, you won’t succeed in business if you don’t make enough sales. Small-business owners want to attract new customers, while retaining and selling more to existing punters; your content should help them to do all of the above. Many small-business owners are far better at their trade than selling and marketing, but practical advice from reliable expert sources can make a big difference to their sales and bottom line.    

6 Always be clear, comprehensive yet concise 

Good small-business content provides a clear, understandable explanation, no matter how complex the information or topic. Sadly, much small-business content is just as dry, dense and inaccessible as the stuff it seeks to explain. Your job is to use plain English to explain key points – not unnecessary detail – so cut out the waffle, jargon and business speak. Tell small-business owners what they need to know in as few, simple words as possible. Answer all of their likely questions.

“Life is too short and there are many other things that most of us would rather do than read dull content”  

7 Don’t create boring content – be interesting

When was the last time a boring headline really captured your attention? When did a dull introduction last make you want to carry on reading? Never, right? Much small business content is mind-numbingly boring. Admittedly, some small-business subjects are rather dull, but your challenge is to make them engaging and bring them to life. Life is too short and there are many other things that most of us would rather do than read dull content. 

Moreover, small-businesses owners often have incredible insight and fascinating stories to tell. Feature their words in your small-business content. Use their knowledge and experience to help others learn. Small-business content really doesn’t have to be boring.  

8 Be original – dare to be different

There really is an ocean of small-business content out there and competition for clicks, likes and shares is fierce. Don’t just copy others – find ways to be different. 

About 15 years ago, when I started writing and editing small-business content, I brought in many ideas that I’d learned from working on award-winning customer magazines, focusing more on owners and their stories, interviewing and quoting them more heavily in features (they’re the real experts, right?). 

I produced a huge amount of small-business owner profiles, case studies, Q&As, “listicle” content items, guides and infographics. All of these things weren’t common in business writing (no one called it content) back then. I also came up with more imaginative and engaging headlines and copy, which brought far better results. Never be afraid to try new things.

“Don’t waste your time or theirs by publishing small-business content that’s dull, irrelevant or hard to understand”

In conclusion

To succeed when producing content for small businesses, you really need to understand your audience. Don’t waste your time or theirs by publishing small-business content that’s dull, irrelevant or hard to understand.

Write about things that matter in a clear, concise and accessible way. And if you set out with the key aim of helping small-business owners to be more successful, save time, money and make their lives less stressful – you won’t go far wrong.

• Written by Dead Good Content founder Mark Williams. For more than 15 years, Mark has specialised in writing small-business content. He has helped such organisations as the government, high-street banks, insurance companies, utility providers, software giants and accountancy organisations to reach UK SMEs. For four years Mark also wrote small-business content for The Guardian.

The business benefits of blogging and how to do it

You’ve probably never heard of Justin Hall, but he’s widely credited as producing the first blog website (Links.net), created while he was a college student in 1994.

It would be three years before Jorn Barger (editor of influential early blog website Robot Wisdom) coined the term “weblog”, which he used to describe the process of “logging the web” while “surfing” online. Barger is credited as the man who invented blogging as we know it. 

In 1998, the first blog appeared on a mainstream news website in the USA, and one year later, programmer Peter Merholz shortened weblog to blog, the term now commonly used. Growth in popularity was rapid. According to WenDesignerDepot.com, worldwide, there were only 23 blog websites in 1999. Just seven years later – there were more than 50m. There are now thought to be more than 440m.

Inbound links can really make a big difference to your search engine rankings and producing high quality, appealing blogs can encourage others to link to your website.

Business benefits

Probably the key benefit that blogging can bring is it can boost your search engine rankings. But using the right keywords in sufficient density, on-page optimisation (ie writing your website page in a way that allows search engines to easily understand what it’s is about) and other SEO tactics will only get you so far.

You also want links to your site from other, relevant, trusted websites, because Google also ranks pages according to how authoritative it believes them to be. Inbound links can really make a big difference to your search engine rankings and producing high quality, appealing blogs can encourage others to link to your website.

Raise your profile

You don’t have to confine your blogs to your own website, you can make them available to others. If your blogs are published on the right websites, it can seriously help to raise your business’s profile (online and offline), while including links can also drive traffic back to your website. 

Being seen to have insightful or thought-provoking opinions as an expert on either small-business topics or those relevant to your trade or sector can enhance your personal and professional credibility. This can lead to other media opportunities, which can also raise the profile of you and your business. 

Blogs can also be a good way to reach out and start conversations, which can help you to develop trust and stronger customer relationships.

Blogging can give a voice to your brand, giving others a better idea of what your brand values (ie what your business stands for). Blogs can also be a good way to reach out and start conversations, which can help you to develop trust and stronger customer relationships. This can ultimately create leads and drive sales. And one of the big benefits of blog marketing is it’s no cost or low cost (you can pay others to write blogs for your business). 

Don’t bore readers

Before starting to blog, be crystal clear about your audience. Who are they, what needs do they have and what value can your blog offer them?

Avoid writing about boring subjects – they turn people off. Pick interesting things to write about. If there’s no avoiding a boring topic – at least write about it in an interesting way. Short blogs are best (600-700 words); favour short sentences and paragraphs that are free of jargon and spelling errors. Use subheadings to split up the copy and draw readers in. 

Your blogs should be optimised for Google, of course. Keep the tone warm and accessible, but professional throughout. Show readers that you know what you’re talking about and let your personality shine through. Don’t pack your blogs with sales messages (they also turn people off).

Offer genuine value 

Pick an irresistible title (asking questions is a proven tactic). From the off, engage readers with your words. Inform them. Provide them with a solution or useful knowledge. If suitable – entertain them or make them smile. Make them think. 

Give them genuine value, because it encourages people to “know, like and trust” your brand. Before offering a contentious opinion, consider how it could be received (and how this could affect your business). Some subjects are best avoided, however passionate you feel about them.

Make sure, when published, readers can easily share your blog via email or social media platforms. Welcome feedback and engage in conversations.

Make sure, when published, readers can easily share your blog via email or social media platforms. Welcome feedback and engage in conversations. Tell readers how to contact your business if appropriate. You could even use the opportunity to get them to sign up to receive a regular email from your business. For best results, blog regularly and track response/results to see which blogs work best and when. Above all, enjoy it. Like business – blogging should be fun.

• This blog was written for Manage My Website