What's my turnover?

xfish

I have a deal with a car dealer that I lend the money to buy cars. My profit is fee (commission) paid when the car is sold.
An example:
I lend money to buy VW Golf, let's say £10k. Two weeks later they sold the car. They pay me £10k back increased by agreed interest(fee/commission - don't even know how to name it). I don't own the car at any stage, I can't sell it privately I only provide funds.

Income from this business is around £1000-£1500 a month.

What is my turnover for tax purposes? Do I need to be VAT registered?

Thx

MissSarah1972

Turnover is different to profit.

The turnover is how much you take & profit is what you have left after you have paid your outgoings.

Where do you get the money to loan them from?

xfish

MissSarah1972 wrote: »

Where do you get the money to loan them from?

My savings.

Debt_Free_Chick

Unless there are special HMRC rules for this kind of thing, then repayment of the loan is not turnover - it's just that - repayment of loan capital.

It looks to me like your turnover is the profit you make on the loan - so the extra payment made by the dealer - the interest, fee, commission as you describe it.

meer53

I don't think you're ready to get involved in this scheme yet. Get some professional financial advice before parting with your money. It all sounds a bit dodgy to me.

PasturesNew

If you imagine that the £10k is a bicycle .... and you lend your bike out to somebody for a month for £100, they return your bike and you get £100. Turnover is £100 I'd have thought.

Not so sure that lending money to a business is legal/safe.... you might need some financial license for that.

xfish

meer53 wrote: »

I don't think you're ready to get involved in this scheme yet. Get some professional financial advice before parting with your money. It all sounds a bit dodgy to me.

You don't need to worry about me. I've been doing this for about 3 years now, I work for this garage it's not dodgy at all.
It's how they work - they have money from investors and pay them agreed fee. Few of this investors are VAT registered few are not.
I haven't registered for VAT as I thought that fee is my turnover so I don't need to. Just wanted to see what other people think.

MissSarah1972

xfish wrote: »

You don't need to worry about me. I've been doing this for about 3 years now, I work for this garage it's not dodgy at all.
It's how they work - they have money from investors and pay them agreed fee. Few of this investors are VAT registered few are not.
I haven't registered for VAT as I thought that fee is my turnover so I don't need to. Just wanted to see what other people think.

It's not what we think it's what you are earning makes you liable for vat or not

xfish

MissSarah1972 wrote: »

It's not what we think it's what you are earning makes you liable for vat or not

Ok So what am I earning? Just the fee/commission or from my example £10k as well?

MissSarah1972

xfish wrote: »

Ok So what am I earning? Just the fee/commission or from my example £10k as well?

Erm how do I know?

Sambucus_Nigra

I think you could get into hot water in the future here, so I suggest you need to talk to an accountant.