Selling things you have made feels like a hobby that pays for itself, and for a while it often is. But once you are making things in order to sell them, the law sees you as a trader, and a few rules apply whether you sell five items a year or five hundred. None of them are hard. Most makers just have never had them explained in one place.
This guide covers tax, the new HMRC reporting rules for online marketplaces, your customers’ rights, and the product safety rules for the crafts where they matter most. It is a plain-English starting point, not legal or tax advice. Every section links to the official guidance, and if your situation is complicated, an accountant is worth the fee.
Are you trading or is it a hobby?
HMRC looks at what you are doing, not what you call it. Selling a few things you made for yourself and no longer want is unlikely to be trading. Making things in order to sell them, regularly, at a profit is likely to be trading, even part-time and even if the profit is small. HMRC’s guidance on selling through online platforms gives examples.
If you are trading, two things follow: you may owe tax on your profit, and the consumer and safety rules below apply to what you sell.
The £1,000 trading allowance
You can earn up to £1,000 a year from trading before you need to tell HMRC, through the trading allowance. The figure is your income before costs, across everything you sell, in a tax year (6 April to 5 April).
- Under £1,000 in sales: you usually do not need to register or pay tax on it.
- Over £1,000 in sales: you need to register for Self Assessment. You then choose either to deduct the £1,000 allowance or to deduct your actual costs (materials, packaging, postage, fees and so on), whichever is better for you.
Most makers who spend a lot on materials are better off deducting their real costs, which is a good reason to keep receipts from the start.
Registering and paying tax
If you start trading, register for Self Assessment by 5 October after the end of the tax year in which you started. For example, if you started selling in the 2026 to 2027 tax year, register by 5 October 2027. You then file your return online by 31 January and pay any tax due by the same date.
You pay Income Tax on your profit above your Personal Allowance, together with any other income you have, and you may pay National Insurance too. If crafting is a side income alongside a job, the profit is added to your salary when tax is worked out.
The new marketplace reporting rules
Since 2024, online marketplaces have had to send HMRC the details of sellers who make 30 or more sales, or receive 2,000 euros (about £1,700) or more, in a calendar year. That includes the big names such as Etsy, eBay, Vinted and Amazon, and smaller marketplaces too. Platforms report by 31 January for the previous year and send you a copy of what they reported.
Being reported does not mean you owe tax, and it does not change the rules above. It means HMRC can see your marketplace income, so if you are trading, it should be on your tax return. If you are only clearing out things you no longer need, you can explain that if HMRC asks.
Making Tax Digital
Making Tax Digital for Income Tax means keeping digital records and sending HMRC quarterly updates through compatible software. It applies to sole traders whose income from self-employment and property, before costs, is over:
- £50,000 from 6 April 2026
- £30,000 from 6 April 2027
- £20,000 from 6 April 2028
Most makers are well under these figures, but if your shop is growing, it is worth keeping your records in a spreadsheet or app now rather than a shoebox. HMRC’s guidance explains who is affected.
VAT
You only need to register for VAT if your taxable turnover goes over £90,000 in any rolling 12 months. Very few makers reach that. If you are not VAT registered, you do not charge VAT on your products.
Your customers’ rights
Buying online gives customers rights that apply to every seller, including small makers:
- What you sell must be as described, of satisfactory quality and fit for purpose, under the Consumer Rights Act 2015. If it is faulty, they can reject it for a full refund within 30 days.
- Customers can usually cancel within 14 days of receiving an item bought online, for any reason, under the Consumer Contracts Regulations. If your policies say so, they pay the return postage.
- Personalised and made-to-order items are an exception. A mug with someone’s name on it, or a piece made to the customer’s measurements, can be excluded from the 14-day cancellation right. Faulty items are still covered.
Say clearly in your shop policies what you accept back and how. Our help centre has a guide to writing shop policies.
Product safety
Everything you sell must be safe in normal use. For most crafts that means sensible design, good materials and clear care instructions. Some products have their own rules, and these are where makers most often get caught out:
- Toys, and anything a child might play with. Toys must meet the Toy (Safety) Regulations, carry UKCA or CE marking, and come with the right warnings. Soft toys, teething items and anything with small parts need particular care. Decorative items that look like toys can count as toys.
- Soap, bath bombs, balms and creams. These are cosmetics. Before you sell one, it needs a safety assessment by a qualified assessor, a named Responsible Person in the UK, a notification on the government’s Submit Cosmetic Product Notification service, and a compliant label. See the government’s cosmetics guidance.
- Candles and wax melts. Fragrance oils often contain ingredients that must be declared on a hazard label under the CLP rules, and candles need fire safety warnings. Your fragrance supplier’s safety data sheet tells you what to include. We cover this in more detail in a separate guide.
- Food and drink. Register with your local council as a food business at least 28 days before you start selling, and follow the food hygiene and allergen labelling rules.
- Clothing and textiles. Garments and textiles need a label showing the fibre content. Children’s clothing has rules on cords and drawstrings, and nightwear has fire safety rules.
- Anything electrical, including lamps and light-up decorations, must meet electrical safety rules.
Our help centre’s guide to vendor responsibilities links to the official guidance for each, and your local Trading Standards team gives free advice to small businesses.
Copyright and trademarks
You can only sell designs you have the right to use. Characters, logos, football club crests and song lyrics belong to someone else, and selling them without a licence can lead to takedowns, fines or worse. Our guide to copyright, design rights and trademarks explains where the lines are.
Customer details
If you keep customers’ names and addresses, even in a notebook, data protection law applies: keep them secure, only use them for the order unless they agree to more, and do not add people to a mailing list without their consent. You may also need to pay a small yearly fee to the Information Commissioner’s Office; the ICO’s self-assessment takes a couple of minutes.
Insurance
No law requires a sole trader to have business insurance, but public and product liability cover is worth considering, especially for candles, cosmetics, toys and food. Most craft fairs ask for public liability before they will give you a pitch. Policies for small makers are usually inexpensive.
A simple checklist
- Keep every receipt and a record of every sale from day one.
- Once your sales pass £1,000 in a tax year, register for Self Assessment by 5 October the following autumn.
- Check whether your products have their own safety rules, and label them properly.
- Write clear shop policies, including what you do and do not accept back.
- Only sell designs you have the right to use.
- Keep customer details safe and private.
Do I have to pay tax on crafts I sell?
If you are making things in order to sell them, you are probably trading. Under £1,000 of sales in a tax year, the trading allowance usually means there is nothing to declare. Over £1,000, register for Self Assessment and pay tax on your profit if your total income is above your Personal Allowance.
Will marketplaces tell HMRC about my sales?
Online marketplaces must report sellers who make 30 or more sales, or about £1,700 or more, in a calendar year. You get a copy of what was sent. It does not change what you owe; it just means HMRC can see the income.
Do I need to register as self-employed to sell on a marketplace?
Not to open a shop. You need to register for Self Assessment once your trading income goes over £1,000 in a tax year. Many makers start under that and register when their shop grows.
Can customers return personalised items?
Not for a change of mind, usually. Personalised and made-to-order items can be excluded from the 14-day cancellation right. If the item is faulty or not as described, the customer is still entitled to a remedy.
Are there new laws on selling homemade crafts in the UK?
The main recent change is the marketplace reporting rule, which started in 2024 and means platforms report sellers to HMRC. Making Tax Digital for Income Tax began in April 2026 for higher earners and extends to more sole traders in 2027 and 2028. The product safety rules for toys, cosmetics, candles and food are long-standing but often missed.
This guide was checked on 16 October 2026 against GOV.UK guidance. It is general information, not legal or tax advice. Rules and thresholds change, so check the official pages linked above, and speak to an accountant or your local Trading Standards team about your own situation.