Buying/selling cars as a side business?

motorguy

londonTiger wrote: »

ps. you're going to be making £200 on each car tops. £400 a month you can easily done on ebay and would be less hassle. Just need someone to be at home to take delivery of your stock though - cos I doubt your work will appreciate taking delivery there.

I had a car that i was planning reselling delivered to work once when i was part time trading. Was hoping for a subtle handover but it arrived on the back of a transporter and parked up outside the office windows....

I also kept a few cars in their car park - they were a 24x7 operation so it was hard to spot cars that were there semi permanently.

Those were the days....

forgotmyname

I remember my insurance used to say any vehicle that I own or have permission to drive.

A mate thought that was a good idea and went with the same company and taxed other people's cars for a few £ in his pocket.

Cars seemingly legal as no computer to say it was or was not insured.

londonTiger

ChumLee wrote: »

Or use your local Argos eBay pick up point.

your chinese wholesalers are going to deliver packages to argos pickup point???

Richard53

Serious question - how do HMRC, Trading Standards or anyone else decide who is a trader and who is a private seller? I'm thinking of the guy (and there are plenty) who buys a wreck for under a grand (say for the sake of argument a 'classic' barn find such as an MGB), spends a year and a lot of money restoring it to good condition, and sells it for £8000. Technically (because no-one is looking at his expenditure) he has sold at a profit, and yet he isn't a trader. Equally, I have sold motorbikes in the past for more than I paid for them, largely by good luck. No-one expects the SOGA to apply in these situations.


There must be a distinction between this and a trader who buys with the sole purpose of making a profit, and I guess it comes down to intention - profit made in the course of a genuine hobby, and profit made on purpose as a business. But who decides which is which?

worried_jim

colino wrote: »

From time to time HMRCs taskforces will look at driveway dealers and make an example of a few to scare off the rest. Do a bit of research on HMRCs Connect system and you'll know Big Brother is already here.

I heard about Hmrc connect on radio 4 this week. This is exactly the type of thing it does, they know!

Herzlos

Richard53 wrote: »

Serious question - how do HMRC, Trading Standards or anyone else decide who is a trader and who is a private seller?

A pattern of buying cars from auction and selling them a week later? A large collection of cars on driveway, all listed on ebay? The same mobile number popping up on autotrader week after week with different vehicles? The fact that someone has bought the car from him, had problems and reported it?

The 'private trader' trick is something they'll have dealt with thousands of times, so I'm sure they'll be fairly wise to it.

Selling a few cars in a short space if time is fine, but how often before it starts to become odd? Even my most easily bored friends don't swap cars more often than every 6 months or so, so those changing them on a monthly basis (unless buying and scrapping) are going to be serious outliers.

motorguy

Richard53 wrote: »

Serious question - how do HMRC, Trading Standards or anyone else decide who is a trader and who is a private seller? I'm thinking of the guy (and there are plenty) who buys a wreck for under a grand (say for the sake of argument a 'classic' barn find such as an MGB), spends a year and a lot of money restoring it to good condition, and sells it for £8000. Technically (because no-one is looking at his expenditure) he has sold at a profit, and yet he isn't a trader. Equally, I have sold motorbikes in the past for more than I paid for them, largely by good luck. No-one expects the SOGA to apply in these situations.


There must be a distinction between this and a trader who buys with the sole purpose of making a profit, and I guess it comes down to intention - profit made in the course of a genuine hobby, and profit made on purpose as a business. But who decides which is which?

Ultimately, HMRC can decide you ARE, and its up to you to prove you're not.

Typically, they'll not look at which individual is buying off autotrader and selling a year later, they'll contact the auction houses and car dealers and see whos buying multiple cars (or trade cars from the dealers), or contact autotrader, gumtree and ebay and see whos selling multiple cars. OR contact the DVLA and see whos registered as trade or sending in trade slips.

Then they'll fan out from there.

If you're buying 3 cars a year from auction its unlikely they'll be able to justify the cost of an investigation, but sell a few a month, and they're likely to conclude they're missing significant revenue.

Far too big a paper trail these days. Used to be you could get an autotrader agent out to take a photo, give him a duff address and a PAYG mobile number and you were laughing. Not now though.

dannyrst

Quick question, how does this differ from people buying houses, doing them up and selling them on for £30,000 profit?

Other than the fact he's buying cars not houses.

jimjames

dannyrst wrote: »

Quick question, how does this differ from people buying houses, doing them up and selling them on for £30,000 profit?

Other than the fact he's buying cars not houses.

Most people only have one house they live in and do up. If you're doing multiples at the same time then you still need to pay CGT on the profit.
Same if you own one car and sell. Start to do lots and you are trading.

maninthestreet

dannyrst wrote: »

Quick question, how does this differ from people buying houses, doing them up and selling them on for £30,000 profit?

Other than the fact he's buying cars not houses.

Capital gains tax applies will apply to the house sales, cars are exempt from capital gains tax.