Anyone bought a car to sell right away
Discussion
If your doing it as a one off then I wouldn't worry.
If your planning on doing it a lot then it might be worth doing it as a legit business.
Saying that though, I've often bought a car, kept it for a few weeks then sold on for a profit because I fixed a problem or just didn't like the car and sold it with a better description and photos. Never for business purposes as the money always went on the next car which I owned and drove as my own with no initial intention of buying to make a profit. Most of the time I lost out massively buying stupid money pits thinking it was a good idea.
Last time I counted, I've owned around 45 cars since 2006. I've never had any issue with any official body.
If your planning on doing it a lot then it might be worth doing it as a legit business.
Saying that though, I've often bought a car, kept it for a few weeks then sold on for a profit because I fixed a problem or just didn't like the car and sold it with a better description and photos. Never for business purposes as the money always went on the next car which I owned and drove as my own with no initial intention of buying to make a profit. Most of the time I lost out massively buying stupid money pits thinking it was a good idea.
Last time I counted, I've owned around 45 cars since 2006. I've never had any issue with any official body.
The Spruce goose said:
Please define business from your point and what tax you should actually pay, as this will help to make you comment more valid.
I'll let the HMRC field that question.http://www.hmrc.gov.uk/guidance/selling/income.htm
HMRC said:
Am I liable to tax on the sales I make?
If you are just selling some unwanted items that have been lying around in the attic, the answer is probably no. In order to pay tax on the goods you sell, you either have to be trading or make a capital gain. If you are trading you will be self-employed.
Am I trading?
Essentially ‘trade’ is a two-way relationship between a trader and a customer – where the trader provides goods or services to the customer for reward on a commercial basis. In addition, the courts have identified ‘nine indicators or ‘badges’ to help decide whether a trade exists or not. It is not always easy to decide even using these ‘badges’ because a trade may exist even if only one or two of the indicators are present.
Once you have read this guide and examples and you still don’t know whether you are trading, please contact us so we can help.
You are trading if you:
-sell goods you have bought for resale
-make items yourself and sell them, intending to make a profit
-sell (or buy) goods on behalf of others for financial gain
(for example on commission)
-provide a service and receive payment (whether in cash or in kind).
If you are trading you may have to pay Income Tax and National Insurance Contributions (NICs) and VAT, and we will treat you as self-employed in that trade.
But you are not trading if you:
-sell occasional, unwanted personal items through Internet auctions
or classified advertisements
-attend a car boot sale once a year to sell unwanted household items.
If you are not liable to Income Tax you may still be liable to other taxes.
If you are just selling some unwanted items that have been lying around in the attic, the answer is probably no. In order to pay tax on the goods you sell, you either have to be trading or make a capital gain. If you are trading you will be self-employed.
Am I trading?
Essentially ‘trade’ is a two-way relationship between a trader and a customer – where the trader provides goods or services to the customer for reward on a commercial basis. In addition, the courts have identified ‘nine indicators or ‘badges’ to help decide whether a trade exists or not. It is not always easy to decide even using these ‘badges’ because a trade may exist even if only one or two of the indicators are present.
Once you have read this guide and examples and you still don’t know whether you are trading, please contact us so we can help.
You are trading if you:
-sell goods you have bought for resale
-make items yourself and sell them, intending to make a profit
-sell (or buy) goods on behalf of others for financial gain
(for example on commission)
-provide a service and receive payment (whether in cash or in kind).
If you are trading you may have to pay Income Tax and National Insurance Contributions (NICs) and VAT, and we will treat you as self-employed in that trade.
But you are not trading if you:
-sell occasional, unwanted personal items through Internet auctions
or classified advertisements
-attend a car boot sale once a year to sell unwanted household items.
If you are not liable to Income Tax you may still be liable to other taxes.
Huntsman said:
I did a couple of weeks ago, bought a van for £400, spent £300 doing some stuff, sold for just over a grand, nice little £300 profit for very little work. Sod the tax man.
The tax man can spend £100 on labour and make back £1,000, they may not be interested but it's only because of the return.The Spruce goose said:
I love the taxman website it is a right laugh.
quote
''But you are not trading if you:
attend a car boot sale once a year to sell unwanted household items.''
There must be a lot of tax law breakers out there. Do people really follow this draconian rules?
Someone must - I understand that's how the government funds many of the services it provides...;)quote
''But you are not trading if you:
attend a car boot sale once a year to sell unwanted household items.''
There must be a lot of tax law breakers out there. Do people really follow this draconian rules?
I'm guessing the rules on car boots are more aimed at discriminating between someone doing a house clear out and selling their old stuff and someone buying boxes of cheap tat to sell on new on a car boot sale. One is a business the other is getting money back on things you no longer want
Engineer1 said:
I'm guessing the rules on car boots are more aimed at discriminating between someone doing a house clear out and selling their old stuff and someone buying boxes of cheap tat to sell on new on a car boot sale. One is a business the other is getting money back on things you no longer want
It's amazing though that at these sales (we have done two in about two years) before the thing is even open, the *preofessionals* are scouring your paste table looking for a few bargains ... (to pass on at a profit of course) - ie some people do evry one they can to make a few bob.And to be honest, why shouldn't they? It'd be buttons for the tax man anyway
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