What's my turnover?

saintjammyswine

Speak to HMRC in the first instance. Then an accountant on how to maximise income within the rules.

Firefox1975

How are you lending the money?

cash? or bank transfer to the garage? or bank transfer to the initial seller of the car? and then , who is paying you? the garage? or the new buyer?

It sounds like you are acting as a "bank".

Its certainly an interesting situation! :-) honestly not sure of the legalities.

kazwookie

I'd be putting the 10K on a fixed rate interest account, then at least you know where the money is, and what rate of interest you are getting.

Like others have said ring HMRC and then a local accountant.

I take it you have records of what you have lent out ££, how much was repaid, and what the interest rate / commission rate was and all the dates?

paulmapp8306

Do you pay income tax on this money? Your earning £1k+ per month, so £12k per year on this alone - which would mean an income tax liability. You also work at the garage which I presume you get paid for - which is more income.

If yor not VAT registered now - your acting illegally. HMRC will want their pound of flash - and its not small sums were talking at that level of proffit over 3 years. Were talking potentially up to £45k worth of undeclaired income.

westy22

Here is what HMRC say on the subject http://www.hmrc.gov.uk/manuals/bimmanual/bim62201.htm

xfish

Firefox1975 wrote: »

How are you lending the money?

cash? or bank transfer to the garage? or bank transfer to the initial seller of the car? and then , who is paying you? the garage? or the new buyer?

It sounds like you are acting as a "bank".

Its certainly an interesting situation! :-) honestly not sure of the legalities.

99% of the time it's a bank transfer, sometimes to garage's account, more often to initial seller.
After the car is sold the garage is paying me.

kazwookie wrote: »

I'd be putting the 10K on a fixed rate interest account,

Feel free to do it. I'd rather do what makes me more money...

paulmapp8306 wrote: »

Do you pay income tax on this money?

Yes I pay income tax and NI.

All I'm worrying about is - do I have to be VAT registered?

paulmapp8306

OK - in that case I wouldnt think so personally. Its not goods or services, its interest on a loan which (AFAIK) doesnt attract VAT (just like bank savings dont). If its commission then it may be different as that would be as a result of a service which may attract VAT. I dont know enough of the specifics on VAT or the ost economical way of documenting the income. Get some professional advice.

DCFC79

xfish wrote: »

I've been doing this for about 3 years now,

If you have been doing this for 3 years surely you should what a turnover is and have researched whether you need to be VAT registered or not.

xfish

DCFC79 wrote: »

If you have been doing this for 3 years surely you should what a turnover is and have researched whether you need to be VAT registered or not.

And how exactly did you help with your post?

Uncertain

paulmapp8306 wrote: »

OK - in that case I wouldnt think so personally. Its not goods or services, its interest on a loan which (AFAIK) doesnt attract VAT (just like bank savings dont). If its commission then it may be different as that would be as a result of a service which may attract VAT. I dont know enough of the specifics on VAT or the ost economical way of documenting the income. Get some professional advice.

I would agree.

In some respects it is a bit like an auction house where VAT is payable on their commission, not on the total sale price. Presumably then a very (very) small auction house wouldn't earn enough commission in a year to put them over the VAT threshold.

You do need to get professional advice. Personally I would not contact HMRC yourself in the first instance but see an accountant.