does this constitute trading?

Mrs_Chip

We are starting a business running a mobile fish and chip van. The current owner of the van is delivering it to us at the end of August and he will spend a day with us showing us how the van operates etc. We want to do this in 'anger' and serve customers, but we will not be in a positon to start trading for several months.

The van delivery coinsides with a charity event in our village - if we donate all net profits would this days activity be treated as 'trading' by HMRC?

If the van still belonged to the current owner on the day, would this make a difference (we would just be helping him out for the day)?

We will have all the necessary food hygene certs etc.

jexygirl

save yourself hassle and help him out for the day...;)
Pay for vehicle AFTER handover perhaps?
However, why are you getting it now, when you cant trade it for several months? You are tying your cash into something that will sit and rust on your driveway for months - depreciation of assets instantly.
In buisness, it starts paying for itself the minute it arrives / justifying its existence, or its out - includes employees!
Is it really so much of a bargain of the century, you can afford to let it sit that long? I know from previous threads you hoped in the region of 2knet a month profit, thats alot of money to take to make, so if its a dream vehicle, and no other can match it ever, sure, but if its just one that does the job and doesnt change the buisness plan, I would say dont buy till you can actually start to trade it.
JEx

Mrs_Chip

We are totally new to both the mobile catering business and being self employed, I don't think we will be able to hit the ground running. In different circumstances we would learn the ropes by working for someone else, but we haven't got that option.

Plan is for the van to be delivered and paid for late August, we will do some village runs once we have got to grips with the cooking side of things, this could be as early as September, but it could take a bit longer, and I want to delay registering with HMRC and the council (council really as consent is so expensive) until we need to.

We are funding the van from savings, which are not earning much at all, so whether the money in the bank or in the van, there's not a lot in it.

I think we will make sure the paperwork shows ownership passing over on the following day!

soolin

I would have thought regardless of whetehr you were running a charity or doing it as a business you would need to register properly with both HMRC and the council and pay all the necessary insurances and licenses etc.

You are not a charity, therefore you cannot just take funds for them, you will in effect be trading but passing all the money through your books to charity. Hence you need 'books' and accounts to show where the money is going. That would also still leave you with a taxable income as the profits are yours before you donate them. In fact as this could be very complicated you would almost certainly need an accountant to assist.

You would also be owning a van you bought for business, and again that is going to be complciated on paper especially if you later depreciate the costs of the van, or expect any of the insurance/tax etc for the charity period to be allowed.

Mrs_Chip

Soolin

Either the current owner will be insured, do the accounting etc, or we will. We have got insurance lined up to start from our first day of ownership (whenever that might be) and the council are happy to allow us a one-day trading consent.

I beginning to think the former option is the best all round.

texranger

Mrs_Chip wrote: »

we will do some village runs once we have got to grips with the cooking side of things, this could be as early as September, but it could take a bit longer, and I want to delay registering with HMRC and the council (council really as consent is so expensive) until we need to.

you wont be able to do any trading from the van until you get the necessary licences etc from the council.
the council Environmental officer will need to inspect the van before you can trade and even be considered for a council licence to operate.
Also you are getting this at the wrong time of the year trade will slow down from Sept. and all through the winter. you should be thinking of getting this in early March and getting ready for a summer season of Fairs/Galas as this is where you will make your money

COOLTRIKERCHICK

please, do it the right way round....by trying to cut corners, and saying you are not trading, and doing the odd run locally to get the hang of it will not wash with the council or the environment agency etc..

We all know that you can not hit the ground running when starting a business, BUT this is part and parcel of starting a new business venture...

you can not expect the previous owner of this van to 'carry you' for the first few months by saying it is his van..you either take the plunge yourself or not at all...

If you rub the council up the wrong way in the beginning you will have an enemy for the rest of your business trading life...

I personally think a chip van will do well all year round.... between now and the end of August think about regular rounds in the evening between 5pm and 8pm. especially where there is no fast food/chip shop housing estates will be good... and poss if there is a community centre etc which hold certain classes events etc on certain nights, you could park nearby ready for those people leaving

Mrs_Chip

CTC - Sorry, I didn't make myself clear - this arrangement is only for ONE DAY - the day the guy selling the van spends with us showing us how it all functions - we absolutely would not do anything to put at risk our relationship with the council.

We are currently completing the consent form (blimey what a palaver!), as soon as we are ready it will go in with the cheque for £1300 or so . as this is an annula charge, we dont want to pay it until we are ready to go.

We have scouted the local villages and there is plenty of scope for us to trade, many have an hour round trip to get to a chippy. We are also lucky to be in a tourist area, there are loads of big camp sites without any facilities. I think if we wanted to we could flog ourselves and make a very good living, but that's not really what this is all about. So we will start slowly, perhaps only doing one or two nights a week, and work up the trade slowly - I don't think we could do full weeks while we are learning.

The council will not let us trade in the town because there is already a chippy there (only a small town), so we will be looking for places on private land to trade from if we need to, breakfast or lunch trade would be a useful addition.

ankspon

Sounds a bit fishy to me

Mrs_Chip

In what way David?

ankspon

Just a pun,sorry