How best to monetise hobbies?

Discussion in 'Askaboutbusiness' started by gnf_ireland, Nov 14, 2017 at 4:46 PM.

  1. gnf_ireland

    gnf_ireland Frequent Poster

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    Two friends recently asked me about how I think they should go about monetising hobbies - which of course got me thinking of how it should be done

    I suggested both should register their business name with the CRO (fee 20 euro) to formalise the name and allow them better access to website domains and protection in the future, if needed. That said, it is unlikely either venture is going to make millions :)

    In both cases, there is likely to be some initial outlays and they are unlikely to break even in the first year or two. It is likely it will be a number of years before they make any money from their ideas.

    One of the friends only income is from PAYE - they supply a Form 12 each year done by themselves, and that is it. They are looking to set up a series of niche walking/cycling/photography tours where they are from, and combine this with some blogging/social media to see if they can make a small footprint for themselves. Their initial outlays would be on websites/promotional material and potentially insurances etc.

    The second friend is a little more complex, having PAYE, director of a company, rental and investment/deposit incomes from different sources. The have a keen interest in organic gardening, and wish to sell some of their produce. Initial outlays include seeds, fertiliser, allotment costs, materials etc. They will only know if they make any money in the autumn when they go to sell the produce. In some ways its similar to a farming sideline ...

    Both of their questions were the same - should they set up as a sole trader, or just track all income/expenditure and at the end of the year record any loss/profit on the form 11/12. They realise that any loss can only be used against future profits in this area and not against the other income. What would the experts on here advise?
     
  2. T McGibney

    T McGibney Frequent Poster

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    2 quick points

    A CRO business name registration has no protection function whatsoever. Search the register for "The Market Bar" and you'll see dozens at least.

    In general losses on a hobby activity don't count for income tax purposes, even if a commercial business surrounding a similar activity is established at a future date.

    My advice: enjoy your hobbies as they are. Don't spoil them by trying to turn them into businesses with all the headaches that this entails.
     
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  3. Brendan Burgess

    Brendan Burgess Founder

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    Couldn't agree more.

    If the allotment holder has a few surplus vegetables, why not give them to friends?

    The only possible reason they could be considering it as a business activity, is if they have a plan to turn it into a full-time business e.g. a stamp collector wants to become a stamp dealer. They could use it to test the market.

    There is a good chance that they will be turned off their hobby.

    Brendan
     
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  4. gnf_ireland

    gnf_ireland Frequent Poster

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    Thank you both for your input. I happen to fully agree with you, but not sure the others will :)

    This will not happen in either case. One of the guys is in the medical profession so unlikely to give that up to grow vegetables. The other works as a lecturer, so the same would apply I am guessing :)

    So taking that into account, lets say they actually manage to turn over a profit in year 1 (2018), how is it best handled from a taxation point of view? Just declare it as supplementary income on the IT return? And if they make a loss, its 0 with no losses carried forward?
     
  5. T McGibney

    T McGibney Frequent Poster

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    If it's a hobby, and it generates a little positive cash flow, I wouldn't necessarily count that as taxable income. If all outgoings are included it's unlikely to be such anyway. But that all really depends on the circumstances of the case.
     
  6. SBarrett

    SBarrett Frequent Poster

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    Agree 100%. A hobby is something you should enjoy without the pressures of having to earn an income from it.

    If they are going to try sell vegetables, they are going to have to stand on market stalls all weekend and for not very much money.

    Tell them to forget about it and to enjoy their vegetables.

    Steven
    www.bluewaterfp.ie
     
  7. CBG-84

    CBG-84 New Member

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    Hi, new to this forum but I am also starting a small market garden business as a sideline with a full time PAYE job and also have rental income.

    I'm wondering if I need to register the new business as a sole trader and how to do that - for example date business opened and end of year tax date?

    My taxes are finalized for 2016. I am a chargeable person so will be filing a form 11 next year as is due to my rental income. I aim to make a profit of approx €1000 in the first year and more thereafter all going well.
     
  8. Buddyboy

    Buddyboy Frequent Poster

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    Just my 2 cents as well. Don't turn a hobby into a business. I did once and regretted it. What used to be a fun pastime with my choice of if and when I did it, turned into a chore where I was at the mercy of paying customers. The amount of overhead, plus cancellations, administration etc. just ruined the fun. Luckily I didn't give up the day job, and when I quit the (part-time) business, I was able to go back to doing it as a hobby, and enjoying it, again.
     
  9. michaelm

    michaelm Frequent Poster

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    Yes, unless your hobby is making uilleann pipes.