Probably been done to death: dealer or non-dealer??
Discussion
Following on from this: http://www.pistonheads.com/gassing/topic.asp?h=0&a... where i confessed my hatred for my current employment.
I've been having a ponder and a chat with 'er-indoors whilst on the chemo and I think I may have decided on something to do on the side of my current business which will give me some motivation and enjoyment in an area that i've done not so badly in the past. Here is my plan:
. Take circa £5k to £10k from my current business and set up a small (loosely termed) car purchase / sales project.
. Purchase specialist or target car from enthusiast or auction and resale for a small or large profit after cosmetics and servicing.
. Repeat whilst taking into consideration profits and tax etc.
. Go from £5k car on day 1 to higher value car further down the line.
. Keep it small and only 1 car at a time.
. Cover my arse where needed.
As the topic title suggests, the dealer vs non-dealer question has probably been done to death but I am hoping the minds of PH will be able to steer me toward some sort of knowing as to what I can and cannot do before I cross over into car dealer status. Main question: How many cars can I buy and sell from my home or work address before I start to rattle cages? Would it make a difference legally if i register cars with my home address or under a new business title at my current work address?
When I first got into performance cars I always bought with the rule that the car had to have come from an enthusiast, be of very niche nature (limited run / growing popularity etc), had to be incredibly well maintained with all docs and receipts (and choice mods if favourable) and if possible would come with a transferable manufacturer warranty to save both the buyer and seller aggro should anything break in the first few months of ownership. With that philosophy I went from £8k Shogun Sport Warrior through C5 RS6, E61 M5 Tourer to £37k C63 PPP without losing any real money. Obviously i had put some cash in along the way and it was done over 5 or 6 years but the theory behind my idea means I could possibly do the same in an accelerated environment if I were to buy with the same rule of thumb. My question is, at what point do i become a car dealer rather than a guy with a plan to increase capital by way of intelligent purchasing?
Everything would be bought and sold through a dedicated bank account so the tax man will be fully aware of what's going on. Nothing hidden, just made easy so I know im not going to jail for some unseen crime. I also need to find out about names on log books; do i set up as a trader to keep the number of registered keepers down or do i just stay private and add a notch to every car i own? Setting up as a trader is moving into the dealer zone which is what i want to avoid but adding a tally to low owner cars will possibly affect sale values and raise questions from buyers. Do i now need liabilities insurance post-sale or can i keep on using the 'sold as seen' form that ive made buyers sign with previous cars i've let go? Buyers have always been over the moon with the cars I've sold and they have generally gone to people looking for specific things. One of my cars went to the head of a TV network and //M collector so i know my cars go out better than they come in. They have always been happy to buy 'sold as seen' on the basis that I could explain any aspect of the car from birth to sale. That's the sort of thing I want to continue.
To make it clear from the start, this won't be a new career for me (unless i strike it lucky) but will be a project running on the theories I have had in place since I got into performance vehicles. I also know that it may amount to very little in way of profit but that is not the reason I am doing it. I love the whole process of buying and selling cars I'd drive myself so it would be no great hardship if I came away in a couple of years having done no more than driven a couple of dozen interesting vehicles for a few weeks at a time.
If anyone knows how to do it without the need for dealer certification and unwanted investigation then please do let me know. It's something i am looking to get stuck into very quickly so i look forward to your responses.
Eddie
I've been having a ponder and a chat with 'er-indoors whilst on the chemo and I think I may have decided on something to do on the side of my current business which will give me some motivation and enjoyment in an area that i've done not so badly in the past. Here is my plan:
. Take circa £5k to £10k from my current business and set up a small (loosely termed) car purchase / sales project.
. Purchase specialist or target car from enthusiast or auction and resale for a small or large profit after cosmetics and servicing.
. Repeat whilst taking into consideration profits and tax etc.
. Go from £5k car on day 1 to higher value car further down the line.
. Keep it small and only 1 car at a time.
. Cover my arse where needed.
As the topic title suggests, the dealer vs non-dealer question has probably been done to death but I am hoping the minds of PH will be able to steer me toward some sort of knowing as to what I can and cannot do before I cross over into car dealer status. Main question: How many cars can I buy and sell from my home or work address before I start to rattle cages? Would it make a difference legally if i register cars with my home address or under a new business title at my current work address?
When I first got into performance cars I always bought with the rule that the car had to have come from an enthusiast, be of very niche nature (limited run / growing popularity etc), had to be incredibly well maintained with all docs and receipts (and choice mods if favourable) and if possible would come with a transferable manufacturer warranty to save both the buyer and seller aggro should anything break in the first few months of ownership. With that philosophy I went from £8k Shogun Sport Warrior through C5 RS6, E61 M5 Tourer to £37k C63 PPP without losing any real money. Obviously i had put some cash in along the way and it was done over 5 or 6 years but the theory behind my idea means I could possibly do the same in an accelerated environment if I were to buy with the same rule of thumb. My question is, at what point do i become a car dealer rather than a guy with a plan to increase capital by way of intelligent purchasing?
Everything would be bought and sold through a dedicated bank account so the tax man will be fully aware of what's going on. Nothing hidden, just made easy so I know im not going to jail for some unseen crime. I also need to find out about names on log books; do i set up as a trader to keep the number of registered keepers down or do i just stay private and add a notch to every car i own? Setting up as a trader is moving into the dealer zone which is what i want to avoid but adding a tally to low owner cars will possibly affect sale values and raise questions from buyers. Do i now need liabilities insurance post-sale or can i keep on using the 'sold as seen' form that ive made buyers sign with previous cars i've let go? Buyers have always been over the moon with the cars I've sold and they have generally gone to people looking for specific things. One of my cars went to the head of a TV network and //M collector so i know my cars go out better than they come in. They have always been happy to buy 'sold as seen' on the basis that I could explain any aspect of the car from birth to sale. That's the sort of thing I want to continue.
To make it clear from the start, this won't be a new career for me (unless i strike it lucky) but will be a project running on the theories I have had in place since I got into performance vehicles. I also know that it may amount to very little in way of profit but that is not the reason I am doing it. I love the whole process of buying and selling cars I'd drive myself so it would be no great hardship if I came away in a couple of years having done no more than driven a couple of dozen interesting vehicles for a few weeks at a time.
If anyone knows how to do it without the need for dealer certification and unwanted investigation then please do let me know. It's something i am looking to get stuck into very quickly so i look forward to your responses.
Eddie
ecain63 said:
I also hate working with the public (especially women with too much time on their hands) and find my stress levels raised when dealing with time wasters and general numpties!
... and you want to be a used car dealer? Ok, it'd be blokes with too much time on their hands, but wouldn't it just end up going the same way?ecain63 said:
If anyone knows how to do it without the need for dealer certification and unwanted investigation then please do let me know.
There is no such thing as dealer certification.You are either trading for profit, acting as a trader, or not. There is no allocation or allowance of car sales in the eyes of HMRC.
Clearly one or two is unlikely to warrant an investigation.
But you need to read the many threads on PH and ask yourself if it is really worth the hassle.
The fact you will be setting aside a specific bank account for the venture and aiming for a profit, shows to me you are a dealer, as you are doing it for financial gain.
Plus, as said , if you hate the public you will hate dealing with them over cars... a whole world of pain...not all of them, but most.. never think that because you will be selling a niche "premium" product idiots wont be crawling out from under woodwork, trust me they will!
Plus, as said , if you hate the public you will hate dealing with them over cars... a whole world of pain...not all of them, but most.. never think that because you will be selling a niche "premium" product idiots wont be crawling out from under woodwork, trust me they will!
Thanks guys. I'm not so fussed about dealing with general public in this case as it'll only be one car at a time and I hope to choose cars that will only attract a certain type of customer. Yes I might get the odd blagger but you can easily steer timewasters away if spotted early. Like i said, I don't want to run it as a business whether it looks that way on paper or not so I feel i'll have freedom to be be a bit more brutal with those customers who i don't want to deal with. I'm doing it for me, not the money.
Another Q? This new road tax system, is it a help or hindrance to this sort of project? Will it dictate the length of time i have to keep my cars so as not to lose money in wasted e-discs?
Eddie
Another Q? This new road tax system, is it a help or hindrance to this sort of project? Will it dictate the length of time i have to keep my cars so as not to lose money in wasted e-discs?
Eddie
Vaud said:
So what will you do? Take the V5 and leave the seller with their section, or move it to be registered by you?
Dunno, depends whats legal in my situation. I've heard of people leaving the seller with the yellow traders slip and a promise to follow up with a new owner once resold, a bit like a car dealer would but not if you get my gist. Not sure if this is a good plan though. Or, I could just leave the V5 under previous keeper until resale as it's not proof of ownership as such. But, if i am to keep the car for a couple of months or more due to limited sale frequency etc I reckon the safe thing to do would be to fill it in under my name and just add an owner at each sale point. All have downsides, some legally and some financially. Tricky one to decide on as i don't want to go all 'underground' with it. But at the same time i don't want an admin nightmare. Sending V5's away and waiting for them to return before you can resell the car will be a hindrance for sure as they can take a while at best.
Leaving the car under the previous keepers ownership till you sell it??? Good luck with that one!
I think the trouble you will have is someone clued up will come and view the car and ask "are you a dealer", you will go "eerr no I buy and sell the odd car for enjoyment" and they will just think you are bulls
tting. I have no objection and its a good idea, just being honest.
Plus realistically as you are doing it for profit you will have to notify the tax man, whether they would ever realise is another
I think this guy on here : http://www.pistonheads.com/gassing/profile.asp?h=0... does this: http://www.bmwclassics.co.uk/about/index.html which is similar
This guy does something similar: http://www.danielcurnock.co.uk/home/index.php
Personally if it was me and I had a decent job I would just keep my eye out for any bargains of cars I've wanted to own, own and drive them for a few months doing odd jobs/minor refurbs then punt it on for a profit, maybe 3/4 or 5 a year.
I think the trouble you will have is someone clued up will come and view the car and ask "are you a dealer", you will go "eerr no I buy and sell the odd car for enjoyment" and they will just think you are bulls
tting. I have no objection and its a good idea, just being honest.Plus realistically as you are doing it for profit you will have to notify the tax man, whether they would ever realise is another
I think this guy on here : http://www.pistonheads.com/gassing/profile.asp?h=0... does this: http://www.bmwclassics.co.uk/about/index.html which is similar
This guy does something similar: http://www.danielcurnock.co.uk/home/index.php
Personally if it was me and I had a decent job I would just keep my eye out for any bargains of cars I've wanted to own, own and drive them for a few months doing odd jobs/minor refurbs then punt it on for a profit, maybe 3/4 or 5 a year.
Picked from other threads:
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.
Even if you don't make a profit you have the associated liability under the SOGA, etc
Trade plates? Trade insurance? etc...
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.
Even if you don't make a profit you have the associated liability under the SOGA, etc
Trade plates? Trade insurance? etc...
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