Want to sell one car at a time, can I do it as long as I pay
Discussion
Hi all,
I am interested in buying and selling one car at the time (so I always have only 2 cars on my name, one is my regular car) my question is, as long as I am paying the income tax normally as a sole trader/self employed do I need to register as a car dealer? Will the tax man/any government body will have a problem with me?
Thanks for your help
I am interested in buying and selling one car at the time (so I always have only 2 cars on my name, one is my regular car) my question is, as long as I am paying the income tax normally as a sole trader/self employed do I need to register as a car dealer? Will the tax man/any government body will have a problem with me?
Thanks for your help
Orgo5555 said:
Hi all,
I am interested in buying and selling one car at the time (so I always have only 2 cars on my name, one is my regular car) my question is, as long as I am paying the income tax normally as a sole trader/self employed do I need to register as a car dealer? Will the tax man/any government body will have a problem with me?
Thanks for your help
Look up "badges of trade" on the HMRC website. That'll give you an idea of how the tax man will view it. The more "badges" you rack up, the more likely they'll treat it as trading rather than a hobby.I am interested in buying and selling one car at the time (so I always have only 2 cars on my name, one is my regular car) my question is, as long as I am paying the income tax normally as a sole trader/self employed do I need to register as a car dealer? Will the tax man/any government body will have a problem with me?
Thanks for your help
And then you need to consider the point at which your buyers could start to rely on the Sale of Goods Act and other consumer protection nanny-state stuff.
Technically, I think you're allowed to sell six cars a year before you'll flag up as a trader. However... (quoted from an old thread)
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.
Well I still don't understand that if I buy car and sell car, lets say it happens 20 times a year for example. As long as I am declaring all my profits and pay all the taxes for profit, do I need to do anything in addition? I.e, is there any difference tax man/legislation wise between me and any other sole trader like estate agent/consultant/advisor etc?
It's an unregulated industry.
By and sell as much as you want, there is no legal threshold for volume of cars. Keep your records, pay your tax.
Insurance, etc are separate issues that HMRC have no interest in.
As for trader insurance, liability insurance, and moving cars into your name - will depend on your appetite for risk.
The reality is if you are selling 2 cars a year that are in your name for a few £000 profit, then you will probably slip under the radar.
By and sell as much as you want, there is no legal threshold for volume of cars. Keep your records, pay your tax.
Insurance, etc are separate issues that HMRC have no interest in.
As for trader insurance, liability insurance, and moving cars into your name - will depend on your appetite for risk.
The reality is if you are selling 2 cars a year that are in your name for a few £000 profit, then you will probably slip under the radar.
If treated as a trader from a profit point of view, what's the situation with regards to expenses (such as insurance, advertising etc), repairs/renovations etc? It's just with classics it might just be hard to break even?
Also where would you stand on the personal use aspect?
Looks like a minefield to me, especially from the personal liability point of view which make the tax aspects relatively easy.
Also where would you stand on the personal use aspect?
Looks like a minefield to me, especially from the personal liability point of view which make the tax aspects relatively easy.
Will you advertise yourself as a trader?
That in itself comes with hassles.
What happens if one of your cars has a major fault for its new owner and they want you to sort it quoting SOGA, court etc..?
Will you have the readies to fight it or sort it out?
Are you doing this to make money?
Will it be additional income?
A few threads appear on PH from people thinking of setting up as a trader and the general feedback is don't do it!
That in itself comes with hassles.
What happens if one of your cars has a major fault for its new owner and they want you to sort it quoting SOGA, court etc..?
Will you have the readies to fight it or sort it out?
Are you doing this to make money?
Will it be additional income?
A few threads appear on PH from people thinking of setting up as a trader and the general feedback is don't do it!
Grenoble said:
It's an unregulated industry.
By and sell as much as you want, there is no legal threshold for volume of cars. Keep your records, pay your tax.
Insurance, etc are separate issues that HMRC have no interest in.
As for trader insurance, liability insurance, and moving cars into your name - will depend on your appetite for risk.
The reality is if you are selling 2 cars a year that are in your name for a few £000 profit, then you will probably slip under the radar.
This, as long as everything is declared (income) and you have a reasonably low turnover it should be fine. Although you cannot claim VAT and other expenses etc unless you are VAT registered.By and sell as much as you want, there is no legal threshold for volume of cars. Keep your records, pay your tax.
Insurance, etc are separate issues that HMRC have no interest in.
As for trader insurance, liability insurance, and moving cars into your name - will depend on your appetite for risk.
The reality is if you are selling 2 cars a year that are in your name for a few £000 profit, then you will probably slip under the radar.
lestershaw said:
does this mean
that if i am going to sell my current car, and i know i am going to make a big loss, that i can setup as a business and put my losses against any future car profit if i was going to sell cars for a part time job?
It's not that straight forward I'm afraid that if i am going to sell my current car, and i know i am going to make a big loss, that i can setup as a business and put my losses against any future car profit if i was going to sell cars for a part time job?
If you are a sole trader and you consistently post losses while claiming back from VAT etc you will most probably be investigated by the tax man.lestershaw said:
does this mean
that if i am going to sell my current car, and i know i am going to make a big loss, that i can setup as a business and put my losses against any future car profit if i was going to sell cars for a part time job?
HMRC might be interested in your gift of a car to the business?that if i am going to sell my current car, and i know i am going to make a big loss, that i can setup as a business and put my losses against any future car profit if i was going to sell cars for a part time job?
crazy about cars said:
This, as long as everything is declared (income) and you have a reasonably low turnover it should be fine. Although you cannot claim VAT and other expenses etc unless you are VAT registered.
I'd be surprised if you couldn't claim genuine expenses such as advertising, administrative, insurance and preparation against the tax you pay on the cars; it should be just standard accounting practices. Where the line is drawn between personal use and preparation for sale is will be a little trickier but I'm sure there will be guidelines for it. VAT registration is a completely separate issue and down to turn over but compulsory if it reaches somewhere around £56K; the correct figure is on the HMRC website. If you are serious a couple of hours with your local accountant will be money well spent and would almost certainly save you many times their fee.
Gassing Station | General Gassing | Top of Page | What's New | My Stuff