Start to trading vehicles
Discussion
Hi all,
I always wanted to be a car trader and now I decided to start my business. I'd have a few questions to avoid the mistakes that causing me unwanted expenses.
When I buy a car with the yellow slip and take the rest of logbook, does the seller have to sign the section 8 on the bottom of left side?
Can I buy any vehicle with using of yellow without any trader license?
Do I have to be self employed to get a trader license?
Do I need an accountat straightaway when I being self employed?
I know they're quite basic questions but I just want to make sure I'll do everything alright.
Thanks for any advice or help!
I always wanted to be a car trader and now I decided to start my business. I'd have a few questions to avoid the mistakes that causing me unwanted expenses.
When I buy a car with the yellow slip and take the rest of logbook, does the seller have to sign the section 8 on the bottom of left side?
Can I buy any vehicle with using of yellow without any trader license?
Do I have to be self employed to get a trader license?
Do I need an accountat straightaway when I being self employed?
I know they're quite basic questions but I just want to make sure I'll do everything alright.
Thanks for any advice or help!
I take it you mean a full time business. Just for starters if you keep the tax and VAT man happy they will leave you alone.In other words don't take the piss and keep your records in order.You will have to register for VAT,self employed and pay NIC's,submit an annual selfassessment form,you could do this yourself but it's best to employ an accountant,pay any income tax,have a motor traders insurance policy. Remember all the cars you have in stock will have to be stored off road,parking them in the road is a no no,Unless you tax them all yourself. Working from home can lead to possible problems with council tax and neighbours.
Then,the most important thing, keep your customers happy. If you do they will recommend you to others and come back again.
Then,the most important thing, keep your customers happy. If you do they will recommend you to others and come back again.
Edited by Old Merc on Sunday 3rd February 15:57
You have to register at DVLA as a motor trader. The person selling you the car (the registered keeper) fills in part 9 V5C/3 (the yellow bit) sends it to DVLA telling them that they have transfered the car to you, and you (the motor trader) keep the rest.
When you sell the car you fill in part 10 V5C/2 (the green bit) give it to the new owner. You then tell DVLA online you have sold the car and destroy the rest of the V5.
Everything you want to know is here https://www.gov.uk/search?q=motor+traders
When you sell the car you fill in part 10 V5C/2 (the green bit) give it to the new owner. You then tell DVLA online you have sold the car and destroy the rest of the V5.
Everything you want to know is here https://www.gov.uk/search?q=motor+traders
Assuming you're doing enough business selling used cars to hit the VAT threshold, how does that work?
You buy a car for £15000, you punt it out at £18000, you don't add VAT to that (I've never overtly paid VAT on a used car?) but the £3000 extra you've made on the sale goes straight back to HMRC as VAT?
Even if you can get £20000 for the car, you've only made £1600 nett?
You buy a car for £15000, you punt it out at £18000, you don't add VAT to that (I've never overtly paid VAT on a used car?) but the £3000 extra you've made on the sale goes straight back to HMRC as VAT?
Even if you can get £20000 for the car, you've only made £1600 nett?
Edited by CAPP0 on Sunday 3rd February 20:02
voicey said:
Old Merc said:
You have to register at DVLA as a motor trader.
Really? I've been trading for years and have never come across such a requirement.If you're asking the absolute basics now, probably your best bet will be to get a job in the trade first and learn it inside out.
Many businesses fail in their first year, so do everything possible not to end up with them.
How many vehicles have you sold professionally? Do you know your rights and those of your customers? How are you going to market your stock? How do you stand out from your competitors? Do you need staff? PAYE? Pension scheme? How are you going to fund warranties? Where are you going to fix and prep the stock. What contacts do you have for parts? And more importantly, what contacts do you have for stock? How are you going to deal with customers (who believe they're always right)?
Only a few questions there, and I'm not in the trade - although I've kept the books and prepared accounts for a number of dealers and have seen many ups and downs over the years.
It's certainly a business you have to have enthusiasm for and can be very lucrative. However, cancel your life for the first few years, as it will take all your efforts in the short and medium term.
Many businesses fail in their first year, so do everything possible not to end up with them.
How many vehicles have you sold professionally? Do you know your rights and those of your customers? How are you going to market your stock? How do you stand out from your competitors? Do you need staff? PAYE? Pension scheme? How are you going to fund warranties? Where are you going to fix and prep the stock. What contacts do you have for parts? And more importantly, what contacts do you have for stock? How are you going to deal with customers (who believe they're always right)?
Only a few questions there, and I'm not in the trade - although I've kept the books and prepared accounts for a number of dealers and have seen many ups and downs over the years.
It's certainly a business you have to have enthusiasm for and can be very lucrative. However, cancel your life for the first few years, as it will take all your efforts in the short and medium term.
CAPP0 said:
Assuming you're doing enough business selling used cars to hit the VAT threshold, how does that work?
You buy a car for £15000, you punt it out at £18000, you don't add VAT to that (I've never overtly paid VAT on a used car?) but the £3000 extra you've made on the sale goes straight back to HMRC as VAT?
Even if you can get £20000 for the car, you've only made £1600 nett?
You think £1600 is not a reasonable profit on a 20k car, for someone working from home? Really?You buy a car for £15000, you punt it out at £18000, you don't add VAT to that (I've never overtly paid VAT on a used car?) but the £3000 extra you've made on the sale goes straight back to HMRC as VAT?
Even if you can get £20000 for the car, you've only made £1600 nett?
Edited by CAPP0 on Sunday 3rd February 20:02
Balazs.Kovacs said:
Hi all,
I always wanted to be a car trader and now I decided to start my business. I'd have a few questions to avoid the mistakes that causing me unwanted expenses.
When I buy a car with the yellow slip and take the rest of logbook, does the seller have to sign the section 8 on the bottom of left side?
Can I buy any vehicle with using of yellow without any trader license?
Do I have to be self employed to get a trader license?
Do I need an accountat straightaway when I being self employed?
I know they're quite basic questions but I just want to make sure I'll do everything alright.
Thanks for any advice or help!
The only thing you need to start as a car trader is a car to sell.I always wanted to be a car trader and now I decided to start my business. I'd have a few questions to avoid the mistakes that causing me unwanted expenses.
When I buy a car with the yellow slip and take the rest of logbook, does the seller have to sign the section 8 on the bottom of left side?
Can I buy any vehicle with using of yellow without any trader license?
Do I have to be self employed to get a trader license?
Do I need an accountat straightaway when I being self employed?
I know they're quite basic questions but I just want to make sure I'll do everything alright.
Thanks for any advice or help!
Buy one and crack on. The rest can be sorted if and when you decide its working for you.
ex1 said:
Eric Mc said:
You need to do a lot of things if you are planning on doing it legitimately.
Not to get started you dont. You've got 3mths to tell HMRC and thats it.There is also the matter of insurances and warranties, applying for trade plates etc.
There is more to running a business than just notifying HMRC.
Our local council has no such requirement although I have heard of it.
Unofficial advice at your own risk would be to try and spin a few round to see if you take to it first. As soon as it resembles a business then start taking the costs and red tape on. It is important to get yourself legit as the revenue can and do sniff round traders and they can be very good at finding people that think they fly under the radar.
Selling cars is one of those jobs people like the idea of but to be honest rarely have the work ethic and patience to make a success of it.
Another way you could do it legitamatly would be to buy/register/insure a second car and run it for a while and sell it on. Proves if you can do it and you could probably get away with 2 or 3 before insurers get interested.
Unofficial advice at your own risk would be to try and spin a few round to see if you take to it first. As soon as it resembles a business then start taking the costs and red tape on. It is important to get yourself legit as the revenue can and do sniff round traders and they can be very good at finding people that think they fly under the radar.
Selling cars is one of those jobs people like the idea of but to be honest rarely have the work ethic and patience to make a success of it.
Another way you could do it legitamatly would be to buy/register/insure a second car and run it for a while and sell it on. Proves if you can do it and you could probably get away with 2 or 3 before insurers get interested.
Eric Mc said:
HMRC is not the only consideration. It's highly likely that if you intend to trade, especially from home, especially second hand cars - that you will need to notify your local council that you have started running a second hand car dealership from your home. In fact, you will need to sort this out BEFORE you even start.
There is also the matter of insurances and warranties, applying for trade plates etc.
There is more to running a business than just notifying HMRC.
Planning is only an issue if he’s displaying or storing lots of cars. People sell their own car from home. Trade plates isn’t a requirement to start as you can tax monthly and warranties be done online in minutes on a case by case basis.There is also the matter of insurances and warranties, applying for trade plates etc.
There is more to running a business than just notifying HMRC.
As I said just buy a car and start trading. If you like it and can make some money then you can formalise things from there. Eric has never done.
Eric Mc said:
Using the term "get away" when offering business advice is always worrying.
Well it's the real world Eric. If you load yourself with a £3000 per year trade policy from a standing start you are likely to fail. In the real world you usually have to be a bit flexible to get yourself going. The key part of my advise there is that as soon as it looks like a business then get it all sorted and advice board.
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