Self Employed/Second income

Sugar_Coated_Owl

If you are buying things, using them yourself and then selling them on I don't see that you need to register for tax.

kriss_boy

razorbladekisses wrote: »

If you are buying things, using them yourself and then selling them on I don't see that you need to register for tax.

but unfortunately the tax man doesnt see it like that.

the best example i can give is buying a computer game, or a box full of computer games, playing them and completeing them and then selling them seperately.

Making a small profit....

Sugar_Coated_Owl

I'm surprised that there is profit in 2nd hand games.

I suppose thinking about it, if you are buying things with the intention of selling it on for profit then it is taxable.

kriss_boy

I used computer games as an example, but thats not what i buy and sell. But its essentially the same process.

It bugs the hell outa me cos if they want me to pay tax on the items i use but make profits on.. what about the items i buy and make loses on? like clothes i wear.. or possibly furniture i use in my house?!?!?! Its swings and roundabouts.

What about things i buy for my car too which im ultimately losing money on.

Instead the system is designed so we pay tax for acutally purchasing items sensibly.

I dont buy many items brand new out of shops, partly because I cant afford them, so why should i then pay tax because i buy second hand goods but at low enough prices so i dont have to lose money on them once im finished with them.

JohalaReewi

kriss_boy wrote: »

but unfortunately the tax man doesnt see it like that.

the best example i can give is buying a computer game, or a box full of computer games, playing them and completeing them and then selling them seperately.

Making a small profit....

Not a problem, you bought the games, played them, then sold them on so you did not 'buy to sell'.

In the end, it comes down to whether the tax man takes an interest in your ebay activites and having done so, decides you are buying to sell (trading) and not buying to use, then selling on when you have finished with it.

JohalaReewi

kriss_boy wrote: »

...
It bugs the hell outa me cos if they want me to pay tax on the items i use but make profits on.. what about the items i buy and make loses on? like clothes i wear.. or possibly furniture i use in my house?!?!?! Its swings and roundabouts.
...

They don't want you to pay tax on items you use and make profits on.

kriss_boy

But its a grey area.... very very grey.....

I have an interest in the items.. I do enjoy playing with them haha... but at the end of the day would I still buy them and play them if I couldnt sell them at profits... perhaps not...

Sugar_Coated_Owl

Are they toys?

greeneye

razorbladekisses wrote: »

Are they toys?

No there guitars.
In theory Kriss you could easily be an avid guitar collector who always has a large number of guitars in your collection and you regularily buy new guitars to add your collection and sell old ones to finance your purchases.

Would be a bit of a grey area really as to wether you were trading i.e specifically buying to sell. Although you would have to bear in mind capital gains tax.

As far as I'm aware the fact that you sell something for more than you paid for it doesn't make you a trader and likewise you can buy something with the specific intention to resell make a loss and have to declare this loss.

Not sure what the time frame is (if any) for buying an item and then reselling it with regards being deemed a trader. And I imagine you'd actually have to be audited for them to be able to track how long you actually had a specific guitar in your hands for.
But who's to say you didn't buy a guitar decided you didn't like it or used it for a gig and then sold it on.

Remember you have I think it's £4,500 CGT allowance each year as do other members of your family etc
Although this is dodgy ground and obviously isn't a solution if you want to start trading heavily.

kriss_boy

The computer game example fits perfect... I buy 'computer games' singularly on ebay, or charity shops or car boots, or in big lots. Play them, enjoy them, then a week later I sell them!

Because I buy them shrewdly and often in unsorted bulk, I can then sell them on at a small profit.