Jewellery Maker Tax UK 2026/27: Metal Stock, Hallmarking and Fees
Self-employed jewellery makers carry unusually high stock costs in silver and gold, plus hallmarking fees most trades never see. Full worked example on £24,000 turnover showing what's actually left after tax.
A trade where materials eat most of the margin
Jewellery making is unusual among self-employed crafts because the raw material cost per item is genuinely high relative to the sale price. A silver ring that sells for £45 might contain £18-£24 of silver, findings and a semi-precious stone before you've accounted for your time, tools, hallmarking or the platform fee that took a cut on the way through. Getting the tax treatment of that metal stock right — and claiming everything you're entitled to around tools, hallmarking and marketplace fees — makes a real difference to what's left at the end of the year.
Self-Employed Tax Calculator
Calculate income tax, Class 2 and Class 4 National Insurance for self-employed and sole traders for 2025/26.
Open Self-Employed Tax calculatorWorked example: part-time maker, £18,000 turnover
Gross income: £18,000 (mix of Etsy sales, a couple of local craft fairs, and some bespoke commissions)
Deductible expenses:
- Precious metal stock used (sterling silver sheet/wire, some 9ct gold): £6,300
- Semi-precious stones and findings (clasps, jump rings, ear wires): £1,400
- Hallmarking fees (Assay Office, plus postage): £320
- Bench tools (torch, polishing motor — capital allowance): £650
- Etsy fees (listing + ~6.5% transaction + payment processing): £1,170
- Craft fair pitch fees (6 fairs across the year): £480
- Packaging and insured postage: £340
- Public liability insurance: £140
- Total expenses: £10,800
Taxable profit: £18,000 − £10,800 = £7,200
Because this falls below the £12,570 Personal Allowance, no income tax or Class 4 NI is due at all. The maker would still need to file a Self Assessment return (gross income exceeds the £1,000 trading allowance threshold), but the tax bill is £0.
Sole Trader Take-Home Pay Calculator 2026/27
Calculate your net take-home pay as a UK sole trader after Income Tax and Class 4 National Insurance. Compare with PAYE employment.
Open Sole Trader Pay calculatorWorked example: full-time maker, £24,000 turnover
Gross income: £24,000
Deductible expenses:
- Precious metal stock used: £8,200
- Gemstones and findings: £1,900
- Hallmarking fees: £420
- Bench tools and equipment (AIA): £900
- Etsy and Folksy fees combined: £1,560
- Craft fair pitches (12 across the year, including one weekend Christmas market at £180): £1,050
- Packaging, insured postage, business cards: £480
- Public liability insurance and workshop contents cover: £220
- Total expenses: £14,730
Taxable profit: £24,000 − £14,730 = £9,270
This is still below the £12,570 Personal Allowance, so again no income tax or Class 4 NI applies. Take-home is £24,000 − £14,730 = £9,270 before any private savings the maker builds up for future tax years.
Worked example: established maker, £32,000 turnover
Gross income: £32,000
Deductible expenses:
- Precious metal stock used (higher proportion of 9ct and 18ct gold work): £11,800
- Gemstones and findings: £2,600
- Hallmarking fees: £680
- Bench tools and workshop upgrade (rolling mill, second torch — AIA): £1,400
- Marketplace fees (Etsy, Folksy, own website payment processing): £2,050
- Craft fair and trade show pitches: £1,300
- Packaging, postage, photography for listings: £620
- Insurance: £260
- Total expenses: £20,710
Taxable profit: £32,000 − £20,710 = £11,290
Still under the £12,570 Personal Allowance threshold — no income tax or Class 4 NI due. This pattern is common in jewellery making: because material costs are such a large share of turnover, many part-time and even fairly active full-time makers stay below the Personal Allowance for several years before profit tips over.
If profit did tip over, say to £15,000 in a strong year: Income tax would be (£15,000 − £12,570) × 20% = £486. Class 4 NI would be (£15,000 − £12,570) × 6% = £145.80. Combined tax and NI: £631.80 — consistent with the FAQ figure above for a £14,500 profit level.
VAT Calculator
Add or remove VAT from any amount. Supports 20%, 5% and 0% UK VAT rates.
Open VAT calculatorPrecious metal stock: cost breakdown per piece
The reason jewellery making looks tax-favourable on the surface — low profit, low tax — is that so much of turnover goes straight back into materials. Here's a typical breakdown for three common piece types:
| Piece | Sale price | Metal/stone cost | Findings | Hallmarking | Platform fee (Etsy) | Approx. margin before time |
|---|---|---|---|---|---|---|
| Silver stacking ring | £28 | £9.50 | £1.20 | £6.50* | £1.82 | £9.00 |
| Gold-fill drop earrings | £42 | £14.00 | £2.50 | n/a (under threshold) | £2.73 | £22.77 |
| 9ct gold pendant | £120 | £58.00 | £4.00 | £6.50 | £7.80 | £43.70 |
*Assay Office fees are typically charged per batch/parcel sent for hallmarking rather than strictly per item, so the effective per-piece cost falls sharply once you batch multiple items into a single submission — a small ring on its own costs far more per-piece to hallmark than the same ring sent as one of a dozen.
Hallmarking: a cost most trades don't have
UK law requires hallmarking for precious metal items over specific weight thresholds: gold over 1g, silver over 7.78g, platinum over 0.5g, and palladium over 1g. Below these weights — a thin silver chain, a small pair of stud earrings — items can legally be sold without hallmarking, though some makers choose to hallmark anyway for the trust signal with customers. Assay Office fees, testing charges and the postage/insurance to send items for hallmarking are all fully deductible, and batching submissions (sending several pieces together rather than one at a time) meaningfully reduces the per-item cost, which is worth planning around your production schedule rather than sending items off piecemeal.
Tools and the Annual Investment Allowance
A jeweller's bench setup — soldering torch, rolling mill, polishing motor, pickle pot, doming block, ring mandrels, flex shaft — typically runs from a few hundred pounds for a basic setup to several thousand for a fully equipped workshop. All of it qualifies for the Annual Investment Allowance, letting you deduct the full cost against profits in the year of purchase rather than spreading it over several years, up to the £1 million annual limit that no jewellery maker will realistically approach. Timing a bigger tool purchase (a new rolling mill, an upgraded torch setup) to a higher-profit year can meaningfully soften that year's tax bill.
Sole trader vs limited company as the brand grows
Most jewellery makers should stay sole traders while profits sit in the £10,000-£30,000 range covered above — the accounting is simpler and there's no material tax saving from incorporating. The comparison changes once a brand scales into wholesale, stockist relationships or a genuinely full-time six-figure turnover:
| Sole trader | Limited company | |
|---|---|---|
| Tax on profit | Income tax (20%/40%/45%) + Class 4 NI (6%/2%) | Corporation Tax: 19% up to £50,000 profit, marginal relief £50,000-£250,000, 25% above £250,000 |
| Admin | Self Assessment only | Company accounts, Corporation Tax return, possible payroll |
| Best fit | Most makers under ~£40,000 profit | Established brands with wholesale/stockist income and profits well above £50,000 |
| Extracting money | All profit is yours after tax | Salary + dividends (£500 dividend allowance, then 8.75%/33.75%/39.35%) |
For a maker earning £45,000 profit as a sole trader, income tax and Class 4 NI would come to roughly £8,700 combined. The same profit run through a limited company at 19% Corporation Tax is £8,550 before any cost of extracting the money as salary or dividends — meaning incorporation rarely pays for itself below this level once accounting fees are factored in.
Marketplace and craft fair fees add up quietly
Etsy charges a listing fee per item (renewed every four months or on sale), a transaction fee of roughly 6.5% of the sale price including shipping, and separate payment processing fees — together these can take 8-9% off gross sales before anything else is deducted. Folksy's fees are broadly similar. Craft fair pitch fees vary widely, from £15 for a small local table-top event to £150-£200+ for a weekend spot at a popular Christmas market, and these are all fully deductible business costs — the discipline that pays off is keeping every marketplace statement and fair booking confirmation, since these fees are easy to lose track of across a busy selling season.
Deductible expenses checklist for jewellery makers
- Precious metal stock: silver, gold, platinum sheet/wire/casting grain (deducted as used)
- Gemstones, semi-precious stones and findings (clasps, ear wires, jump rings, chain)
- Assay Office hallmarking fees, testing charges, and related postage/insurance
- Bench tools and equipment: torches, rolling mills, polishing motors, pickle pots (AIA)
- Marketplace fees: Etsy, Folksy, Not On The High Street listing/transaction/payment processing
- Craft fair and trade show pitch fees, plus travel to them
- Packaging, insured postage, and product photography
- Public liability insurance and workshop contents insurance
- A proportion of home workshop costs (heating, electricity, insurance) if working from home
Filing and paying
Register for Self Assessment once gross sales income exceeds the £1,000 trading allowance, keep records of metal and stone purchases separately from your other running costs (an accountant will want to see stock used vs stock held at year end), and file online by 31 January following the tax year end, paying any income tax and Class 4 NI owed by the same date.
self-employed-tax-ukFrequently asked questions
Do I need to register as self-employed if I only sell jewellery occasionally?
Once your gross sales income from jewellery making exceeds £1,000 in a tax year, you need to register with HMRC and file a Self Assessment return, even if profit after materials is much lower. Below £1,000 gross, the trading allowance covers you and no registration is needed.
Can I deduct the cost of silver, gold and gemstones I buy for pieces?
Yes — precious metal and stone stock is a cost of goods sold, deducted from income as it's used in pieces you sell. If you buy £600 of silver sheet and wire in a year and £150 of it is still unused stock at your year end, only the £450 actually used is deducted that year, with the remainder carried forward.
Are hallmarking fees at the Assay Office tax deductible?
Yes, in full. Assay Office hallmarking fees are an ordinary and necessary cost of selling qualifying precious metal items and are fully deductible against your trading income, along with postage to and from the Assay Office and any collection/testing charges.
Do all my pieces legally need hallmarking?
No — only items over the legal weight thresholds: gold over 1g, silver over 7.78g, platinum over 0.5g, and palladium over 1g. Many lightweight items (thin chains, small stud earrings) fall under these thresholds and can be sold without hallmarking, though some makers hallmark anyway as a trust signal.
Can I claim Annual Investment Allowance on jeweller's bench tools?
Yes. Torches, rolling mills, polishing motors, pickle pots, doming blocks and other bench equipment qualify for the Annual Investment Allowance, up to the £1 million annual limit, meaning the full cost is deducted against profits in the year of purchase rather than depreciated over several years.
How are Etsy and Folksy fees treated for tax?
Marketplace listing fees, transaction fees (around 6.5% on Etsy) and payment processing fees are all fully deductible business expenses, deducted from your gross sales figure before you calculate taxable profit. Keep the marketplace's monthly statements as your evidence.
How much tax will I pay on £24,000 turnover from jewellery sales?
After typical costs — metal and stone stock, tools, hallmarking, marketplace fees and craft fair pitches — of around £9,000-£10,000, taxable profit lands near £14,500. Income tax and Class 4 NI combined typically come to roughly £600-£700 on that profit level.
Should I register for VAT as a jewellery maker?
Only once your turnover approaches the £90,000 threshold, or if you deliberately want to reclaim VAT on expensive metal stock and tools while your customers are mostly VAT-registered trade buyers rather than the public. For most hobbyist-turned-professional makers selling directly to consumers, staying unregistered keeps prices lower.
Is it worth forming a limited company for a jewellery brand?
Usually not until profits are comfortably above £40,000-£50,000 a year, because Corporation Tax at 19% only becomes materially cheaper than sole trader income tax and NI once profits are well past that level, and the extra filing and accounting costs eat into savings below it.
Can I claim a home workshop as an expense?
Yes — a proportion of household costs (heating, electricity, insurance, a fixed rate or actual cost method) for the space used as your workshop is deductible, along with dedicated workshop costs like extraction, ventilation and bench rent if you don't work from home.
Try the calculators
Self-Employed Tax Calculator
Calculate income tax, Class 2 and Class 4 National Insurance for self-employed and sole traders for 2025/26.
Sole Trader Take-Home Pay Calculator 2026/27
Calculate your net take-home pay as a UK sole trader after Income Tax and Class 4 National Insurance. Compare with PAYE employment.
VAT Calculator
Add or remove VAT from any amount. Supports 20%, 5% and 0% UK VAT rates.
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