When does a car seller become a car dealer?
Discussion
I like cars and motorbikes and I quite like working on them.
I have owned quite a few you and therefore sold quite a few and as I move into retirement would like to do a bit more of that.
But all of the vehicles I have sold have been as a private seller.
I definitely don't want to become a motor trader or take on the obligations that I expect motor dealers have to provide in terms of warranties etc.
So if I buy cars or motorbikes and work on them and improve them and later sell them at what stage would I switch from being a private seller to a motor dealer?
Are there any hard and fast rules about this that define whether or not you have to provide dealer services?
I have owned quite a few you and therefore sold quite a few and as I move into retirement would like to do a bit more of that.
But all of the vehicles I have sold have been as a private seller.
I definitely don't want to become a motor trader or take on the obligations that I expect motor dealers have to provide in terms of warranties etc.
So if I buy cars or motorbikes and work on them and improve them and later sell them at what stage would I switch from being a private seller to a motor dealer?
Are there any hard and fast rules about this that define whether or not you have to provide dealer services?
In theory if you sell a single car purely in order to make a profit then you are a trader.
I'm sure the tax man would want his share in the proceeds as well.
Although, in these days of crazy car prices there's plenty of people legitimately selling their cars for more than they bought them for.
I'm sure the tax man would want his share in the proceeds as well.
Although, in these days of crazy car prices there's plenty of people legitimately selling their cars for more than they bought them for.
I don't expect there will be any significant profits involved here so I'm not really worried about the tax implications.
It was more about whether I can sell a regular number of cars and or motorbikes without being classified as a dealer and the need to be providing dealer support and warranties etc
It was more about whether I can sell a regular number of cars and or motorbikes without being classified as a dealer and the need to be providing dealer support and warranties etc
A993LAD said:
I don't expect there will be any significant profits involved here so I'm not really worried about the tax implications.
It was more about whether I can sell a regular number of cars and or motorbikes without being classified as a dealer and the need to be providing dealer support and warranties etc
IMO you can't be reguarly buying and selling cars and claim not to be a trader. It was more about whether I can sell a regular number of cars and or motorbikes without being classified as a dealer and the need to be providing dealer support and warranties etc
You don't have to provide a warranty as far as I'm aware but there's no getting away from the Consumer Rights Act and your obligations under that which could almost be viewed as a warranty of sorts.
When I first started out back in 1999 I was told 6 cars per year was the magic number where HMRC would consider you a car dealer/trader for tax purposes.
If you really want to know, call them. (tax/income purpose)
Sale of goods act/people's statutory rights could well be different.
I'd guess a judge would consider you a dealer if it could be proved you'd sold a few cars/bikes in a month?
I'm sure someone will be along soon with the correct answer.
If you really want to know, call them. (tax/income purpose)
Sale of goods act/people's statutory rights could well be different.
I'd guess a judge would consider you a dealer if it could be proved you'd sold a few cars/bikes in a month?
I'm sure someone will be along soon with the correct answer.
There was something on a similar thread recently. As long as you register anything in your name, I can't see there being a problem. I once only had a car for 3 months in 2016 (Fiat Tempra bought at auction), the buyer didn't mind, as long as I had the complete V5c. There is no magic number, I've bought and sold about 6 in a year and nothing has happened, although a couple would have been motorbikes. 75 cars and 14 motorbikes I've owned. Started in 1983 mind! Sometimes made a profit, mostly not, of course....
It's the crowd who are deliberately acting as traders and pretending they aren't that are dodging their obligations. I won't touch anything with the 'only got the green slip, mate' excuse or 'never got round to putting it in my name' BS.
They're chancers trying to pretend they are private sellers.
It's the crowd who are deliberately acting as traders and pretending they aren't that are dodging their obligations. I won't touch anything with the 'only got the green slip, mate' excuse or 'never got round to putting it in my name' BS.
They're chancers trying to pretend they are private sellers.My impression is that a car dealer would be someone like slippery gobs
te Chris Moyles.
https://www.theguardian.com/media/2014/feb/21/chri...
te Chris Moyles. https://www.theguardian.com/media/2014/feb/21/chri...
There is no fixed rule such as selling x number of cars in a fixed period although high volume is likely to raise suspicions.
It would be assessed by looking at a range of factors, from how the cars were insured to their registration, advertisements, whether any parts or repairs were purchased 'trade', etc.
It would be assessed by looking at a range of factors, from how the cars were insured to their registration, advertisements, whether any parts or repairs were purchased 'trade', etc.
I suspect in reality it would come down to some disgruntled punter dobbing you in to the tax man, local council and/or taking you to small claims court.
Then you'd have to convince The Man that you were just a hobbyist (as above - registering and using the cars over a period of time, selling some cars at a decent loss etc.).
Then you'd have to convince The Man that you were just a hobbyist (as above - registering and using the cars over a period of time, selling some cars at a decent loss etc.).
Although there is no magic number, you havnt mentioned how quickly you are turning these vehicles over and how you are using them? How many is 'regularly' and are you going to have a number of vehicles on your premises at the same time?
My initial thoughts are to concern yourself around VAT Income Tax as well as things like working from a private residence, how your insurance works with these cars, also I believe sites like AT will pick up on your advertising a number of cars and classify you as a trader if you use that route.
The number is important as it will define how visible you are to the authorities. If you have 3-4 vehicles on the go at once and selling at least 1 a month then there is a high chance of being identified. So, although there is no magic number possibly, how many you are planning on buying and selling is important.
My initial thoughts are to concern yourself around VAT Income Tax as well as things like working from a private residence, how your insurance works with these cars, also I believe sites like AT will pick up on your advertising a number of cars and classify you as a trader if you use that route.
The number is important as it will define how visible you are to the authorities. If you have 3-4 vehicles on the go at once and selling at least 1 a month then there is a high chance of being identified. So, although there is no magic number possibly, how many you are planning on buying and selling is important.
Reading the above few posts, I think the truth is, nobody here actually has a clear answer.
Your best bet is to simply enquire with the relevant government body.
Personally, if you are buying cars as a hobby, registering them as your own, using them, repairing them and selling them, then there is nothing to worry about. There is no law that states you have to own a car X long before you are able to sell it again, there is no law that states you can only own X number of cars at one time, also there is no law against selling a car privately and making a profit.
There are many of us on here that buy, own, improve and sell cars, me included. The aim is always not to be out of pocket, but that doesn't make me a dealer. All just my opinions of course.
Your best bet is to simply enquire with the relevant government body.
Personally, if you are buying cars as a hobby, registering them as your own, using them, repairing them and selling them, then there is nothing to worry about. There is no law that states you have to own a car X long before you are able to sell it again, there is no law that states you can only own X number of cars at one time, also there is no law against selling a car privately and making a profit.
There are many of us on here that buy, own, improve and sell cars, me included. The aim is always not to be out of pocket, but that doesn't make me a dealer. All just my opinions of course.
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