Rules on selling cars, how many before i'm a 'trader'?

[tuscan_al]

If I was to start selling the cars I buy and do this say once a month, does this make me a trader? Would I have to advertise it so on autotrader etc? The cars would all be registered in my name, and then used insured etc as mine, then just sold on once I'm bored. I have read/heard things about only being able to sell 6 per year?? Does it make a difference too if I make a profit on these?

[rfn]

IIRC Autotrader will only let you sell three cars in a 12 months period before asking you to become a "Trader" on there.

[slipstream 1985]

i used to do it made a good profit on alot of them. best was a saxo vtr lovely black alloys cd player 115k miles bought for 800 spring broke and ruinied the tyre 250 bill total sold for £1300. need to make sure your selling whats in demand. big boats eg laguna vectra's hard to make money on. saxo's etc easy but make sure its got a long mot. its the mot that sells them.

[smartie]

As far as HMRC are concerened, you are a trader if you buy car with the express intention of reselling to make a profit, be it 1 car a year or 10 a week.

[V8mate]

smartie said:

As far as HMRC are concerened, you are a trader if you buy car with the express intention of reselling to make a profit, be it 1 car a year or 10 a week.

This ^^

[Balmoral Green]

V8mate said:

smartie said:

As far as HMRC are concerened, you are a trader if you buy car with the express intention of reselling to make a profit, be it 1 car a year or 10 a week.

This ^^

And even if you don't make a profit, it still stands, along with all the associated liability under the SOGA

But if you just chop and change a lot, like car chic on here does, you're not.

[bmw2002]

tuscan_al said:

If I was to start selling the cars I buy and do this say once a month, does this make me a trader? Would I have to advertise it so on autotrader etc? The cars would all be registered in my name, and then used insured etc as mine, then just sold on once I'm bored. I have read/heard things about only being able to sell 6 per year?? Does it make a difference too if I make a profit on these?

So is it going to Tuscan_Arfur then?

[edo]

I change cars pretty often mainly due to a lack of attention span. My wife sold her Mercedes for a profit after 6,000 miles and 4 months, but that was market conditions - doesnt make me (or her) a trader. Friends have suggested we get bunting on the drive!

[sday12]

slipstream 1985 said:

i used to do it made a good profit on alot of them. best was a saxo vtr lovely black alloys cd player 115k miles bought for 800 spring broke and ruinied the tyre 250 bill total sold for £1300. need to make sure your selling whats in demand. big boats eg laguna vectra's hard to make money on. saxo's etc easy but make sure its got a long mot. its the mot that sells them.

D+
Try reading the question before answering.
Don't write as if you were speaking.
Must try harder.

[markcoznottz]

tuscan_al said:

If I was to start selling the cars I buy and do this say once a month, does this make me a trader? Would I have to advertise it so on autotrader etc? The cars would all be registered in my name, and then used insured etc as mine, then just sold on once I'm bored. I have read/heard things about only being able to sell 6 per year?? Does it make a difference too if I make a profit on these?

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 either garages or the auctions, because A) your not VAT registered, and B) they have thier own 'guys' they sell too; its an extremely cliquey trade. The 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.

[V8mate]

markcoznottz said:

tuscan_al said:

If I was to start selling the cars I buy and do this say once a month, does this make me a trader? Would I have to advertise it so on autotrader etc? The cars would all be registered in my name, and then used insured etc as mine, then just sold on once I'm bored. I have read/heard things about only being able to sell 6 per year?? Does it make a difference too if I make a profit on these?

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 either garages or the auctions, because A) your not VAT registered, and B) they have thier own 'guys' they sell too; its an extremely cliquey trade. The 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.

Great answer.

Just to add: a friend of mine works for HMRC in their 'investigations' department. Whilst tip-offs are welcome, they don't sit there waiting for them. They are constantly scouring local small ads, ebay, AT etc looking for additional info. And then they cross-check it and match snippets they find with general 'stuff' they find about you on the we. Then they mix in a large dose of 'state-held information' about you.

Google your name.
Then Google your telephone number.
The Google your street.
And so on and so on.

[confused_buyer]

If you are considered a trader then you are more likely to get caught by the VAT office before income tax. If you do one a month then that's 12 cars a year - if they're over £5k then you'll be over the registration limit.

There is no reason why you can't change your personal car as often as you like but if you do make a profit eventually they'll catch up with you. If, on the other hand, you usually make a loss or break even they'll leave you alone as you can then claim back trading losses against your overall tax bill. They won't want that!

Also be aware that if you are in the grey area on trading your insurance is almost certainly invalid as nearly all specifically exclude motor trade use.

[snuffle]

V8mate said:

markcoznottz said:

tuscan_al said:

If I was to start selling the cars I buy and do this say once a month, does this make me a trader? Would I have to advertise it so on autotrader etc? The cars would all be registered in my name, and then used insured etc as mine, then just sold on once I'm bored. I have read/heard things about only being able to sell 6 per year?? Does it make a difference too if I make a profit on these?

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 either garages or the auctions, because A) your not VAT registered, and B) they have thier own 'guys' they sell too; its an extremely cliquey trade. The 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.

Great answer.

Just to add: a friend of mine works for HMRC in their 'investigations' department. Whilst tip-offs are welcome, they don't sit there waiting for them. They are constantly scouring local small ads, ebay, AT etc looking for additional info. And then they cross-check it and match snippets they find with general 'stuff' they find about you on the we. Then they mix in a large dose of 'state-held information' about you.

Google your name.
Then Google your telephone number.
The Google your street.
And so on and so on.

Add on the additional hassle from local council for trading from an unsuitable (residential) site
also Trading Stardards seem to like having a look around
I traded for a number of years, although I made money I hated the time.

[tuscan_al]

Thanks for all the useful advice, I shall pass it onto the relevant party I never plan to make a profit, just wondered where u stand if you do.. Wonder how many people who buy at list then sell for profit ( Audi R8 / GTR's ) declare their 10k + profits ??

Your trader_al

[Mr POD]

I have a mate who dabbles in bargain bucket car sales rarely buying for more than £300 and rarely selling for more than £600. He declares he is a trader, offers an honest description and has trade insurance. He declares profit after costs (Which are higher than you think,) are taken out through a limited company, and takes a dividend twice a year from the business. He pays 21 % corporation tax on the small profits 9 months after the end of his financial year and 10% tax on the Dividend. He has a proper PAYE job, and the dividend pays for a holiday in the summer and for christmas.

I can't see why going legitimate is so bad.