Selling Cars From Home as a Hobby
Discussion
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.
It doesnt matter what the OP wanted to do, some actions can automatically bring you within the definitio of a business.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.
This only re-inforces why the authorities shouldnt believe people!
POORCARDEALER said:
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.
Not doing it much now but have been doing what the OP is suggesting for a long time. Specialised in retro classics. If I purchased one for £1500 I would be dissapointed with £2500. This is often achieved with simply advertising the vehicle properly.
One note for the OP:
Your insurance company may not see it as a 'hobby'. I had to change to a full traders policy years ago. They will be fine with the first 5 or 6 cars but then they will probably deem what you are doing as a business.
Good Luck
TROOPER88 said:
mattdaniels said:
Presumably if your insurance company have switched you to a traders policy it's fairy difficult to defend a decision from HMRC that you're a trader.
You don't get 'switched' to a traders policy; it is a completely separate policy with a different company.mattdaniels said:
Eric Mc said:
HMRC won't worry about that. The fact that the insurance is now based on a "Trading Activity" will be great ammunition for them to contend that a trade is being carried on.
You made my point but so much better than I managed to 
TROOPER88 said:
mattdaniels said:
Eric Mc said:
HMRC won't worry about that. The fact that the insurance is now based on a "Trading Activity" will be great ammunition for them to contend that a trade is being carried on.
You made my point but so much better than I managed to TROOPER88 said:
mattdaniels said:
Eric Mc said:
HMRC won't worry about that. The fact that the insurance is now based on a "Trading Activity" will be great ammunition for them to contend that a trade is being carried on.
You made my point but so much better than I managed to Eric Mc said:
TROOPER88 said:
mattdaniels said:
Eric Mc said:
HMRC won't worry about that. The fact that the insurance is now based on a "Trading Activity" will be great ammunition for them to contend that a trade is being carried on.
You made my point but so much better than I managed to Eric MC; a few that may help you:
1) He who dares wins
2) Get in, get out and dont look back
3) Double your money and try and get rich
Eric Mc said:
Piersman2 said:
Oh FFS sake, I couldn't believe the responses above to the OP's note, then I checked what section it was in, and all becamce clear.
OP, so long as you're just buying and selling the cars for your personal use, and not filling your front drive witih a plethora of old bangers, who is gonna care.
So what if you buy and sell a car every month, it's up to you how long you keep a car.
Just go for it.
Do you think that an HMRC official will believe someone that they bought and sold up to 12 cars a year PURELY for their own personal useage?OP, so long as you're just buying and selling the cars for your personal use, and not filling your front drive witih a plethora of old bangers, who is gonna care.
So what if you buy and sell a car every month, it's up to you how long you keep a car.
Just go for it.
Do you think that the neighbours will be happy to see cars coming and going frequently from a house near to them?
Do you think that they would be happy to see cars on the street or parked in a nearby drive showing "For Sale" signs on a continuous basis?
Edited by Eric Mc on Tuesday 21st September 16:23
You can hide all profits made by the amount of *work* needed to restore said cars.
HMRC official can then simply p
s offHTH
- Bit like the Warwickshire Council bod that lives next to me does ....
Edited by superkartracer on Monday 27th September 15:58
superkartracer said:
Eric Mc said:
Piersman2 said:
Oh FFS sake, I couldn't believe the responses above to the OP's note, then I checked what section it was in, and all becamce clear.
OP, so long as you're just buying and selling the cars for your personal use, and not filling your front drive witih a plethora of old bangers, who is gonna care.
So what if you buy and sell a car every month, it's up to you how long you keep a car.
Just go for it.
Do you think that an HMRC official will believe someone that they bought and sold up to 12 cars a year PURELY for their own personal useage?OP, so long as you're just buying and selling the cars for your personal use, and not filling your front drive witih a plethora of old bangers, who is gonna care.
So what if you buy and sell a car every month, it's up to you how long you keep a car.
Just go for it.
Do you think that the neighbours will be happy to see cars coming and going frequently from a house near to them?
Do you think that they would be happy to see cars on the street or parked in a nearby drive showing "For Sale" signs on a continuous basis?
Edited by Eric Mc on Tuesday 21st September 16:23
You can hide all profits made by the amount of *work* needed to restore said cars.
HMRC official can then simply p
s offHTH
- Bit like the Warwickshire Council bod that lives next to me does ....
Edited by superkartracer on Monday 27th September 15:58
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