Pricing the leap

The arithmetic below is an illustration, not a quote and not a tax calculation. Your costs, your postcode, and your other income change the result. Checked against public descriptions of 2026/27 rules on 28 October 2026.

Stop pricing against your salary

A day rate copied from your employed hourly wage is the wrong anchor. Employment hides employer National Insurance, pension, holiday, sick cover, software, the room, and the hours of selling. A side hustle hides them in the other direction: you pay them yourself, often by not counting them.

Price the job. Then see whether the rate that falls out is a rate you will still accept in February, when the market is wet and the kiln is expensive to fire.

An illustrated order of twenty jars

Imagine a small-batch maker in Central Scotland selling twenty jars to a local shop. None of these numbers are a recommendation. They exist so the missing lines become visible.

If the shop pays £160, about £85 is left for four hours. That is a little over £21 an hour before tax and National Insurance, and before the jars that cracked. If the maker had posted them at “£6 because the wax only cost £2”, the order would have paid the materials and nothing else. Wholesale is not an insult. It is a second price that still has to survive the same list, usually with a smaller margin and a larger quantity.

Retail at a stall can carry a higher price because you are also paying for the day of standing in the weather, the pitch fee, and the stock you carry home. Write both prices down. Do not invent the wholesale price by halving the stall price in the car park.

The costs people leave off

• Platform fees, marketplace commissions, and the payment cut on top of them.
• Wastage. Clay that slumps. Prints that colour-shift. The test batch.
• Software, the domain, the label printer, and the corner of the house you heat while you work.
• Your own time spent on email, which is part of the job even though it does not look like the craft.
• A margin for the week you are ill. A price with no slack is a price that collapses at half-term.
• Tax and National Insurance as a set-aside, not as a surprise in January. A rough habit many sole traders use is to move a slice of each receipt into a tax pot the day it lands. The right slice depends on your other income and, in Scotland, on Scottish income tax bands. It is not a flat 20 percent for everyone.

The £1,000 line and the £90,000 line

The trading allowance is a tax exemption of up to £1,000 a year of gross trading income. It suits very small activity with almost no costs. If you use it, you cannot also deduct expenses for that income. Once gross trading income goes over £1,000, the usual path is to register for Self Assessment and record income and allowable costs properly. “Gross” means before you subtract those costs. A busy stall can cross £1,000 long before it feels like a living.

VAT is a different test. You must register if VAT-taxable turnover goes over £90,000 in any rolling 12 months, or if you expect it to go over £90,000 in the next 30 days alone. Turnover is not profit. A product business with high material costs can approach the line while the owner is still paying themselves very little. Keep a rolling twelve-month total in the same notebook as the prices. Voluntary registration can make sense in some supply chains and is a bad idea in others, especially if your buyers are the public and cannot reclaim the VAT you would have to add. That decision belongs with an accountant who can see your customers.

Raising the price you already published

Existing buyers are not owed last year’s materials cost. They are owed clarity. Give them a date, a reason that is true, and the same quality afterwards.

“From 1 November the standard jar is £18, up from £15. Glass and the pitch fee both moved, and I would rather change the price than thin the wax. Orders I have already confirmed stay at the old price.”

Send it once, to the people with a real relationship, not as an apology tour. If someone leaves, you have learned that they were buying the discount. The customers who stay are the start of a business.

Day rate, product price, retainer

Services and products should not share one method. A product has a unit cost and a channel. A service has a day or a deliverable, and a limit on how many of those fit around a job or a family. A retainer is a way to stop re-selling the same relationship every Monday: a set number of hours or outcomes, invoiced on a set day, with unused time defined. If unused time rolls forward forever, you have built a debt, not a retainer.

Write the method at the top of the price list so you do not mix them under pressure. “Stalls: retail card. Shops: wholesale on 14-day terms, minimum twelve. Private commissions: half before I buy materials.”