Selling Cars From Home as a Hobby
Discussion
Throwing alot of ideas up in the air at the moment, but to clarify my original idea is to have one car at a time, bought for less than it is worth, run it as my daily driver, restore originality in the case of 80s hatches that have 6x9s cut into shelves, enjoy the car for myself then sell on a few months later for an overall profit.
Currently undecided whether to go for £1-2k cars that may have £1000 profit in them, or aim higher at up to £15k for higher margins. In either case I would only buy cars that I actually want to own and have one at a time so there is only one lot of insurance and tax, i only have one space in the garage too.
I doubt I could do more than 5 cars a year this way to be honest, but a £1k profit on each would make a bit of a difference to me, and would satisfy my itchy feet that I get with all my cars. Dont know what else other than "hobby" could be used to class this, its fun to me to buy interesting cars, i have a large bucket list of things I want to own one day, however a "business plan" is needed to ensure i dont lose any money.
Sort of accidentally I have kind of already started in that my 3rd car this year is up for sale on a similar basis to the above, however I did intend to keep all 3 at the outset before I got bored/situations changed
Currently undecided whether to go for £1-2k cars that may have £1000 profit in them, or aim higher at up to £15k for higher margins. In either case I would only buy cars that I actually want to own and have one at a time so there is only one lot of insurance and tax, i only have one space in the garage too.
I doubt I could do more than 5 cars a year this way to be honest, but a £1k profit on each would make a bit of a difference to me, and would satisfy my itchy feet that I get with all my cars. Dont know what else other than "hobby" could be used to class this, its fun to me to buy interesting cars, i have a large bucket list of things I want to own one day, however a "business plan" is needed to ensure i dont lose any money.
Sort of accidentally I have kind of already started in that my 3rd car this year is up for sale on a similar basis to the above, however I did intend to keep all 3 at the outset before I got bored/situations changed
iain014 said:
Throwing alot of ideas up in the air at the moment, but to clarify my original idea is to have one car at a time, bought for less than it is worth, run it as my daily driver, restore originality in the case of 80s hatches that have 6x9s cut into shelves, enjoy the car for myself then sell on a few months later for an overall profit.
Currently undecided whether to go for £1-2k cars that may have £1000 profit in them, or aim higher at up to £15k for higher margins. In either case I would only buy cars that I actually want to own and have one at a time so there is only one lot of insurance and tax, i only have one space in the garage too.
I doubt I could do more than 5 cars a year this way to be honest, but a £1k profit on each would make a bit of a difference to me, and would satisfy my itchy feet that I get with all my cars. Dont know what else other than "hobby" could be used to class this, its fun to me to buy interesting cars, i have a large bucket list of things I want to own one day, however a "business plan" is needed to ensure i dont lose any money.
Sort of accidentally I have kind of already started in that my 3rd car this year is up for sale on a similar basis to the above, however I did intend to keep all 3 at the outset before I got bored/situations changed
If you only have one car at a time, what are you going to use as a daily driver between selling one car and sourcing the next?Currently undecided whether to go for £1-2k cars that may have £1000 profit in them, or aim higher at up to £15k for higher margins. In either case I would only buy cars that I actually want to own and have one at a time so there is only one lot of insurance and tax, i only have one space in the garage too.
I doubt I could do more than 5 cars a year this way to be honest, but a £1k profit on each would make a bit of a difference to me, and would satisfy my itchy feet that I get with all my cars. Dont know what else other than "hobby" could be used to class this, its fun to me to buy interesting cars, i have a large bucket list of things I want to own one day, however a "business plan" is needed to ensure i dont lose any money.
Sort of accidentally I have kind of already started in that my 3rd car this year is up for sale on a similar basis to the above, however I did intend to keep all 3 at the outset before I got bored/situations changed
iain014 said:
Throwing alot of ideas up in the air at the moment, but to clarify my original idea is to have one car at a time, bought for less than it is worth, run it as my daily driver, restore originality in the case of 80s hatches that have 6x9s cut into shelves, enjoy the car for myself then sell on a few months later for an overall profit.
Currently undecided whether to go for £1-2k cars that may have £1000 profit in them, or aim higher at up to £15k for higher margins. In either case I would only buy cars that I actually want to own and have one at a time so there is only one lot of insurance and tax, i only have one space in the garage too.
I doubt I could do more than 5 cars a year this way to be honest, but a £1k profit on each would make a bit of a difference to me, and would satisfy my itchy feet that I get with all my cars. Dont know what else other than "hobby" could be used to class this, its fun to me to buy interesting cars, i have a large bucket list of things I want to own one day, however a "business plan" is needed to ensure i dont lose any money.
Sort of accidentally I have kind of already started in that my 3rd car this year is up for sale on a similar basis to the above, however I did intend to keep all 3 at the outset before I got bored/situations changed
£1K profit on a 1-2K car?????Currently undecided whether to go for £1-2k cars that may have £1000 profit in them, or aim higher at up to £15k for higher margins. In either case I would only buy cars that I actually want to own and have one at a time so there is only one lot of insurance and tax, i only have one space in the garage too.
I doubt I could do more than 5 cars a year this way to be honest, but a £1k profit on each would make a bit of a difference to me, and would satisfy my itchy feet that I get with all my cars. Dont know what else other than "hobby" could be used to class this, its fun to me to buy interesting cars, i have a large bucket list of things I want to own one day, however a "business plan" is needed to ensure i dont lose any money.
Sort of accidentally I have kind of already started in that my 3rd car this year is up for sale on a similar basis to the above, however I did intend to keep all 3 at the outset before I got bored/situations changed
Tell me how, I am interested.
Edited by POORCARDEALER on Tuesday 21st September 18:27
205 gtis and mk1 and 2 golfs pop up quite often that dont need much more than the removal of chav items, a home service and a bit of care to turn back into original factory spec. Clean original models are worth a good premium over the norm because they are a rare sight now, too many rollcages and mean looking bonnets
Bought a porsche 944 for £1500 last year, spent £200 on an mot and slave cylinder, treated it to a bit of a polish and sold it 6 months later for £2250. Obviosly thats only £500 profit, but that was done with very little in the way of forthought, if id planned it a bit better I could probably have paid a bit less originally, and I only did the slave because I was keeping the car for a while.
Edited to add
Bought a porsche 944 for £1500 last year, spent £200 on an mot and slave cylinder, treated it to a bit of a polish and sold it 6 months later for £2250. Obviosly thats only £500 profit, but that was done with very little in the way of forthought, if id planned it a bit better I could probably have paid a bit less originally, and I only did the slave because I was keeping the car for a while.
Edited to add
Edited by iain014 on Tuesday 21st September 18:41
Do not forget that the SOGA applies for trade, and that means warrenty at least to fit for purpose standard. I believe that the authorities look upon 5 being the magic figure, that or more car sales a year makes you a trader in their eyes, unless you can prove otherwise which you may do for one year, be real difficult the second.
Also, do not forget that if you are lucky and do not have a pissed off punter dob you in to the authorities, and you have angelic neighbours who do the same, you can bet that a local pissed off trader who goes through all the hoops will do so!
Also, do not forget that if you are lucky and do not have a pissed off punter dob you in to the authorities, and you have angelic neighbours who do the same, you can bet that a local pissed off trader who goes through all the hoops will do so!
TFatC said:
Do not forget that the SOGA applies for trade, and that means warrenty at least to fit for purpose standard. I believe that the authorities look upon 5 being the magic figure, that or more car sales a year makes you a trader in their eyes, unless you can prove otherwise which you may do for one year, be real difficult the second.
Also, do not forget that if you are lucky and do not have a pissed off punter dob you in to the authorities, and you have angelic neighbours who do the same, you can bet that a local pissed off trader who goes through all the hoops will do so!
There is no 'magic number' never has been. Im assuming the OP, its his parents house? needs to check the deeds. Some dont allow certain businesses to be run from home. Actually, what hes proposing is tax evasion and cleggy says that evil!!!!Also, do not forget that if you are lucky and do not have a pissed off punter dob you in to the authorities, and you have angelic neighbours who do the same, you can bet that a local pissed off trader who goes through all the hoops will do so!
reedman said:
He said he was selling 6 cars a year so that's only 1 every 2 months.
Vat threshold is 53,000 ! so stay under 8K on each car job done.
I buy and sold more than 6 last year just lost money. Lol
JR
VAT threshold is £70,000.Vat threshold is 53,000 ! so stay under 8K on each car job done.
I buy and sold more than 6 last year just lost money. Lol
JR
My hunch is that he is not factoring in his time in working on the cras so his "profit" is not as real as he may think.
If he is making actual annual losses on the activity, then formally notiifying HMRC might be a good idea as then he could start reclaiming tax back through utilisation of losses.
Iain,
Ignore the nay-sayers and the people who can't be bothered to actually read what you have written properly. I did exactly what you said at Uni and made some money on the side. I never did 5 in a year, most I think was 3 cars and 2 bikes, but just like you bought an interesting car to drive round in (lots of MGB's, midgets and beetles as well as motorbikes) and improved them as I drove them about. After a few months or so I'd see something that caught my eye and sell my current steed for a new one. Good choice of cars by the way, my Mk1 GTi is a keeper though and won't ever get sold on.
I asked my accountant (Dad's mate) about tax etc when I was doing it and he said there was nothing wrong with it at all. Someone was right to point out there has never been a 'magic number' before you are considered a trader but under 5 a year and HMRC would have a very difficult time trying to show it was a business and not the fact you get bored easily. In reality they wouldn't pursue this. Some people change their cars more often just out of choice. It can't be held against you if you buy well.
I have a mate who drive 8k miles a month and so he changes his car every 2 months or so so that he doesn't take a big hit in depreciation and he has never been called a trader. He must have sold over 100 cars on ebay in the last 8-10 years and has never had a sniff from ebay/HMRC/council etc etc and even if they did they could easily see he's not trading.
There are lots of people on PH who tell you that you can't do this or that and give you a very rigid hard line answer whereas, in reality, HMRC do not operate like this. As for SOGA applying as a trader and having to give a warranty!??! Nope, what if you sell 2 cars a year? Does it apply then? 3? 4? If you are buying 1 car, driving it as your main transport and then selling it then you will be fine. And as for VAT..WTF? What if you by a Ferrari as your car and sell that for £100k. Then you need to VAT register? NO, as selling a private car IS NOT turnover of a business.
Mate just crack on and do what you want and if asked about this again you do not consider it a business or a hobby, you just like to change your car frequently. You aren't going to have cars parked in the street with for sale sign in the window, you'll just advertise you car once you have restored it to unmolested condition. You see I can read
Ignore the nay-sayers and the people who can't be bothered to actually read what you have written properly. I did exactly what you said at Uni and made some money on the side. I never did 5 in a year, most I think was 3 cars and 2 bikes, but just like you bought an interesting car to drive round in (lots of MGB's, midgets and beetles as well as motorbikes) and improved them as I drove them about. After a few months or so I'd see something that caught my eye and sell my current steed for a new one. Good choice of cars by the way, my Mk1 GTi is a keeper though and won't ever get sold on.
I asked my accountant (Dad's mate) about tax etc when I was doing it and he said there was nothing wrong with it at all. Someone was right to point out there has never been a 'magic number' before you are considered a trader but under 5 a year and HMRC would have a very difficult time trying to show it was a business and not the fact you get bored easily. In reality they wouldn't pursue this. Some people change their cars more often just out of choice. It can't be held against you if you buy well.
I have a mate who drive 8k miles a month and so he changes his car every 2 months or so so that he doesn't take a big hit in depreciation and he has never been called a trader. He must have sold over 100 cars on ebay in the last 8-10 years and has never had a sniff from ebay/HMRC/council etc etc and even if they did they could easily see he's not trading.
There are lots of people on PH who tell you that you can't do this or that and give you a very rigid hard line answer whereas, in reality, HMRC do not operate like this. As for SOGA applying as a trader and having to give a warranty!??! Nope, what if you sell 2 cars a year? Does it apply then? 3? 4? If you are buying 1 car, driving it as your main transport and then selling it then you will be fine. And as for VAT..WTF? What if you by a Ferrari as your car and sell that for £100k. Then you need to VAT register? NO, as selling a private car IS NOT turnover of a business.
Mate just crack on and do what you want and if asked about this again you do not consider it a business or a hobby, you just like to change your car frequently. You aren't going to have cars parked in the street with for sale sign in the window, you'll just advertise you car once you have restored it to unmolested condition. You see I can read
POORCARDEALER said:
£1K profit on a 1-2K car?????
Tell me how, I am interested.
Can easily be done, the only thing is the time period required to find the car is much longer. I spent 3 months looking for an MGB, bought a great model in a nice colour that had been standing for a year. Bought for £2k in March, MOT'd it for next to nothing, enjoyed the summer in it whilst fixing niggles and then sold for £4.5k in August to get a Midget. Bought for £250, loved it and ran it over the winter and sold the following April for £1k. Bikes however are easier as they can be stored with many in a garage and have higher fluctuations from winter to summer.Tell me how, I am interested.
Edited by POORCARDEALER on Tuesday 21st September 18:27
No one told him NOT to do it (that would be my definition of a naysayer) but is it not right that someone is made aware of the POSSIBLE pitfalls?
After all, you checked with your dad's accountant.
And, as I keep pointing out, the OP raised this query on a "Business" forum and referred to a "Business Plan" - the implication being that he considered this to be a "Business" venture (as well as a hobby).
After all, you checked with your dad's accountant.
And, as I keep pointing out, the OP raised this query on a "Business" forum and referred to a "Business Plan" - the implication being that he considered this to be a "Business" venture (as well as a hobby).
R11ysf said:
Iain,
Ignore the nay-sayers and the people who can't be bothered to actually read what you have written properly. I did exactly what you said at Uni and made some money on the side. I never did 5 in a year, most I think was 3 cars and 2 bikes, but just like you bought an interesting car to drive round in (lots of MGB's, midgets and beetles as well as motorbikes) and improved them as I drove them about. After a few months or so I'd see something that caught my eye and sell my current steed for a new one. Good choice of cars by the way, my Mk1 GTi is a keeper though and won't ever get sold on.
I asked my accountant (Dad's mate) about tax etc when I was doing it and he said there was nothing wrong with it at all. Someone was right to point out there has never been a 'magic number' before you are considered a trader but under 5 a year and HMRC would have a very difficult time trying to show it was a business and not the fact you get bored easily. In reality they wouldn't pursue this. Some people change their cars more often just out of choice. It can't be held against you if you buy well.
I have a mate who drive 8k miles a month and so he changes his car every 2 months or so so that he doesn't take a big hit in depreciation and he has never been called a trader. He must have sold over 100 cars on ebay in the last 8-10 years and has never had a sniff from ebay/HMRC/council etc etc and even if they did they could easily see he's not trading.
There are lots of people on PH who tell you that you can't do this or that and give you a very rigid hard line answer whereas, in reality, HMRC do not operate like this. As for SOGA applying as a trader and having to give a warranty!??! Nope, what if you sell 2 cars a year? Does it apply then? 3? 4? If you are buying 1 car, driving it as your main transport and then selling it then you will be fine. And as for VAT..WTF? What if you by a Ferrari as your car and sell that for £100k. Then you need to VAT register? NO, as selling a private car IS NOT turnover of a business.
Mate just crack on and do what you want and if asked about this again you do not consider it a business or a hobby, you just like to change your car frequently. You aren't going to have cars parked in the street with for sale sign in the window, you'll just advertise you car once you have restored it to unmolested condition. You see I can read
Very few traders/retailers who I know, who are very liquid cashwise are netting a grand a car these days.Ignore the nay-sayers and the people who can't be bothered to actually read what you have written properly. I did exactly what you said at Uni and made some money on the side. I never did 5 in a year, most I think was 3 cars and 2 bikes, but just like you bought an interesting car to drive round in (lots of MGB's, midgets and beetles as well as motorbikes) and improved them as I drove them about. After a few months or so I'd see something that caught my eye and sell my current steed for a new one. Good choice of cars by the way, my Mk1 GTi is a keeper though and won't ever get sold on.
I asked my accountant (Dad's mate) about tax etc when I was doing it and he said there was nothing wrong with it at all. Someone was right to point out there has never been a 'magic number' before you are considered a trader but under 5 a year and HMRC would have a very difficult time trying to show it was a business and not the fact you get bored easily. In reality they wouldn't pursue this. Some people change their cars more often just out of choice. It can't be held against you if you buy well.
I have a mate who drive 8k miles a month and so he changes his car every 2 months or so so that he doesn't take a big hit in depreciation and he has never been called a trader. He must have sold over 100 cars on ebay in the last 8-10 years and has never had a sniff from ebay/HMRC/council etc etc and even if they did they could easily see he's not trading.
There are lots of people on PH who tell you that you can't do this or that and give you a very rigid hard line answer whereas, in reality, HMRC do not operate like this. As for SOGA applying as a trader and having to give a warranty!??! Nope, what if you sell 2 cars a year? Does it apply then? 3? 4? If you are buying 1 car, driving it as your main transport and then selling it then you will be fine. And as for VAT..WTF? What if you by a Ferrari as your car and sell that for £100k. Then you need to VAT register? NO, as selling a private car IS NOT turnover of a business.
Mate just crack on and do what you want and if asked about this again you do not consider it a business or a hobby, you just like to change your car frequently. You aren't going to have cars parked in the street with for sale sign in the window, you'll just advertise you car once you have restored it to unmolested condition. You see I can read
POORCARDEALER said:
£1K profit on a 1-2K car?????
Tell me how, I am interested.
Can easily be done, the only thing is the time period required to find the car is much longer. I spent 3 months looking for an MGB, bought a great model in a nice colour that had been standing for a year. Bought for £2k in March, MOT'd it for next to nothing, enjoyed the summer in it whilst fixing niggles and then sold for £4.5k in August to get a Midget. Bought for £250, loved it and ran it over the winter and sold the following April for £1k. Bikes however are easier as they can be stored with many in a garage and have higher fluctuations from winter to summer.Tell me how, I am interested.
Edited by POORCARDEALER on Tuesday 21st September 18:27
Best of luck in your venture.
BlueProp said:
You are allowed to sell upto 7 cars per year before you are consideered 'in the trade', so if you're married then 14.
If you're not exceeding 7/14, then the sale is a private sale with no comeback as there would be if you were a trader.
I considered this at the start of the year, but I would have had to sell 3 or 4 cars a month every month with a decent profit in each to keep up my standard of living. I wouldn't have wanted to be been selling anything less than 3 or 4 year old cars to minimise any potential dogs.
In the end I decided that it's something I would look again at in a few years time when I have no mortgage.... It'll be my part time hobby/job!
Good luck though.
Can you quote me the source of this gem of tax knowledge?If you're not exceeding 7/14, then the sale is a private sale with no comeback as there would be if you were a trader.
I considered this at the start of the year, but I would have had to sell 3 or 4 cars a month every month with a decent profit in each to keep up my standard of living. I wouldn't have wanted to be been selling anything less than 3 or 4 year old cars to minimise any potential dogs.
In the end I decided that it's something I would look again at in a few years time when I have no mortgage.... It'll be my part time hobby/job!
Good luck though.
Edited by Eric Mc on Wednesday 22 September 13:43
dont forget if you are classed as a business then you will also have to comply with things like the Sale of Goods Act and other consumer protection legislation - one of them is making clear you are doing it as a trader and not pretending to be a private seller
for the purposes of that you need to read up on case law to see whether you would be classed as a business
for the purposes of that you need to read up on case law to see whether you would be classed as a business
BlueProp said:
You are allowed to sell upto 7 cars per year before you are consideered 'in the trade', so if you're married then 14.
If you're not exceeding 7/14, then the sale is a private sale with no comeback as there would be if you were a trader.
Almost the quote of the year! I worry about some peoples state of mind, they actually believe thier own bulls***t and speak with absolute authority about stuff they know NOTHING, in fact sometimes less than nothing about. If you're not exceeding 7/14, then the sale is a private sale with no comeback as there would be if you were a trader.
If you are buying to sell on and make a profit, and lets be honest why do it if you dont aim to make a reasonable sum, then you're a business, or a trader in HMRCs eyes. There is no 'magic number' that you can sell a year before they take an interest. HMRC will find out you are selling from home WHEN not IF your neighbours/ supposed mates inform them. Where will you keep these vehicles?, how will you get them back to your house , or to an mot station or garage without trade plates?. More importantly where will you buy your vehicles from , given even seasoned motor trade buyers cant find vehicles at the moment, you wont be able to buy trade-ins from garages they have thier own 'guys' they sell too; its an extremely cliquey trade. Also most car auctions have recently introduced a penalty charge for paying in cash, forcing you to have a card, name address etc on file ;easy pickings for HMRC.
Which valeter/ mechanic/ dent man / windscreen guy/ smart repairer wheel - reconditioner/ mot / towbar /tyre people will you use, because the good companies close to you wont drop well established trade work for a chancer like you (no offence mate). Its not as easy as people think. Im going to sit back and wait for the stock answer.........' im going to valet my own cars'.... .... course you are.
paoloh said:
Here is some advice.
Register the cars in your name, become bored with them and then sell them.....
Did you buy them with the intention to sell for profit? No, you got bored of them.
To be fair to the OP, he MIGHT be able to "trade" in this way for quite a while and even make some profit if he is good at what he does. However, he is walking a tightrope of risk from a number of areas - many of which have already been pointed out.Register the cars in your name, become bored with them and then sell them.....
Did you buy them with the intention to sell for profit? No, you got bored of them.
Let's see how he has got on this time next year.
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