Tax Return / Stocktaking Help Needed

Aeraeni

Bit of an unusual query here, but after speaking with a few people and a bunch of web searching I'm still a bit confused, and hoped someone here might be able to help. Please bear with me.

So, I'm at the end of my first year of running a little business trading in miniatures and miniature painting for various tabletop wargaming hobbies. I'm looking to file my first tax return, and I'm aware I now need to perform a stocktake of all of the items I currently have stored, to correctly calculate my profits. Here's where I'm hitting a snag.

I've accrued a large quantity of second hand models, often by buying full collections that people are getting rid off after changing the hobby. Generally, I then worked to sell off the collections on ebay by chopping them up to individual units, tanks, squads, etc. After some time, I'm now left with the certain portion of these items that didn't sell, and these are what I need to do a stocktake on.

However, I'm very perplexed as to how to appropriately value these items in such a stocktake - more importantly - how to do it accurately enough so that HMRC will be content with the accuracy of my tax return.

Unlike say... a pub where the owner could say 'I have 40 bottles of Becks on hand, and the stock price for these is X or Y', these remaining models are of varying degrees of second hand quality; some need paint stripping, some are poorly built, others might be virtually brand new. In a few cases, a small portion of the models wind up being good for little other than spare parts.

The HMRC website's mention of the subject seems a touch vague, and mentions something about either using the figure that was paid for the stock (difficult to calculate in the extreme due to them being components of what were originally collections of models partially sold, not to mention the differences in quality that affect their proportionate value)... or the figure that they are expected to realise on sale. It then stipulates it should be the lower of these two figures.

I have thought that I could perhaps assign an estimate of the latter figure, judging what I believe I might acquire from them once sold, but what worries me is whether that is accurate enough. Not to mention, how HMRC would approach the issue if they picked me for an audit.

I guess what I'm asking is for any insight people may have as to how someone working with second hand goods such as this might go about stocktaking. I'm very new to doing a tax return, so I guess this seems a touch intimidating and I'm just rather keen to get it right. I hope someone can give me a bit of advice.

pinkypoopydoo

You have to cost it as equivalent units. If you PM me your email address, I will send you an email taking you through it step by step, and can offer any other stock control advice if required.

Or, alternatively, give them a nominal value as class them as "scrap", if you think they will be broken down, rather than resold or be of any great value.

Aeraeni

Thanks, I've PM'd you my email addy. I'll take all the help I can get!