What is it and who is it suited to?
Planning and preparation
Rules and regulations
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Beyond the stall - what's next?
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Rules and regulations
When setting up a market stall there are a number of regulations that you must comply with and it’s vital that you’re aware of any statutory legislation applicable to you. First and foremost you must obtain a licence from your local council to set up your stall. Whether you’re joining an established market, or merely wanting to set up a stall alone on the street, you must have permission to do so from the local authority in your area. Each region is different, so contact your local council to find out how to gain permission. It’s likely that you’ll be asked to fill out an application form, which may entail paying a small administration fee.
As a self-employed person, you must register for self-assessment within three months of starting trading; failure to do so may result in a hefty fine. The easiest way to register is online at HM Revenue & Customs, whereupon you will then have to complete self-assessment tax returns to HMRC at the end of each tax year, in which you must provide details of your income and capital gains. As a self-employed person a market trader is also required to pay National Insurance contributions - check the HMRC website for further details on rates and thresholds.
As with all businesses, VAT is another taxation you must be aware of as a trader. If your turnover reaches the threshold (£70,000 as of 2010) in any 12 month period or less, it will be necessary to register for VAT with HMRC. As of January 2011 VAT stands at 20%, which means that if your goods are standard rated, 20% of your sales will be paid to HMRC. You will however be able to claim back the VAT you have already paid on your purchases. It’s important that you retain good, clear account books right from the start and remember that after the first year of trading you’ll be required to submit your accounts to HMRC.
Obtaining public liability insurance is a legal requirement for anyone setting up a market stall - this will cover you in case of any accidents or injuries to the public during trading. Most markets won’t allow you to trade unless you can prove you’ve taken out this insurance and traders normally need to obtain cover of up to £5m. It’s worth mentioning that if you register with the National Market Traders Federation, you will be offered a free market trader insurance package consisting of public liability and also employers’ liability insurance – which is a statutory requirement if you employ anybody on your stall, even if only on a casual or unpaid basis. There are a number of other providers of public and product liability insurance and employers’ liability insurance for market traders, so shop around to find the best deal for your business.
As a market trader selling goods to the public, be sure to adhere to the Trade Descriptions Act. It’s very simple: don’t sell counterfeit goods and don’t describe your products incorrectly. For example, if you’re selling apples from New Zealand, don’t describe them as British apples. If you do, sooner or later you’ll fall foul of the Trading Standards and will be fined, as well as having your reputation tarnished.
The Sale of Goods Act is another piece of consumer legislation that you must comply with, which is there to help buyers retain redress when their purchases ‘go wrong’. It is in the interest of anyone selling goods or services to understand the implications of the Act and their responsibilities under it. Essentially, what you sell must be fit for its purpose and must also be of satisfactory quality – if it is not, you are obliged to rectify the matter by either exchanging the goods, giving a credit note or a full cash refund. There is no legal obligation to exchange or refund products that are brought back simply because the customer decided they were not right, however it’s worth considering that keeping clients satisfied is the best way to boost your reputation and retain customer loyalty. Ultimately, however, it’s up to you what policy you decide to take.
Food traders, particularly those who sell perishable goods, must also be aware of food hygiene legislation, such as statutory temperature controls in selling and transporting food. You will need to register your stall’s address with the Food Standards Agency and then expect to be inspected by the local council at least once, and maybe twice a year.