Sole trader - quit - is old stock now business or private goods?

Hugh_Manbeing

So I was a sole trader flipping goods online. I was deregistered because I didn't meet the £1000 tax threshold and now have old stock on my shelves. Does that now count as chattels, or if I sell it is it still a business deal as I bought it for purposes of profit? Called HMRC but I don't think they knew.

badmemory

Is it going to matter if you don't meet the £1000 threshhold.

amyfairweather

What do you mean by "I was deregistered", you must have chosen to deregister?  How was this decision forced upon you?

What's the £1000 tax threshold got to do with it?

If you sell these goods for profit, then that should be accounted for as such.

If you sell them at a loss, that can be offset against any profits either now or previous.

Presumably, these goods are accounted for in your (now 'closed') business accounts?

MyRealNameToo

Hugh_Manbeing said:

So I was a sole trader flipping goods online. I was deregistered because I didn't meet the £1000 tax threshold and now have old stock on my shelves. Does that now count as chattels, or if I sell it is it still a business deal as I bought it for purposes of profit? Called HMRC but I don't think they knew.

If you bought it as stock and intend to sell it then you are still trading. If you say your revenue was under £1,000 then you never needed to register in the first place. If you were to sell all the remaining stock within a financial year and generate more than £1k of revenue then you'd need to register again. 

Hugh_Manbeing

Hi yeah it matters to me to know whether the law counts selling my stuff as business or chattels, I want to know where I stand.

What I mean by deregistered is that the HMRC told me that as I didn't make £1000 I was no longer classed as self employed. No I don't understand it either, but that's what they said. Still have the UTC number, but can't file my accounts - I tried and it wouldn't accept them. I called - "we deregistered you".

Hugh_Manbeing

I registered years ago before that rule change. Didn't even know about it until after they deregistered me. Just called HMRC and was told the old stock doesn't count as business goods any more as I'm not self-employed officially. I don't know how I can have a UTC number AND not be classed as self-employed. Not sure if the staff know what they're talking about.

LITRG

Hello - your UTR will stay with you generally for life: https://www.litrg.org.uk/news/confused-all-different-reference-numbers-uk-tax-system#toc-utr. If you re-register for self assessment at any point, your original UTR will be reinstated: https://www.litrg.org.uk/tax-nic/how-tax-collected/self-assessment-and-tax-returns/registering-self-assessment#3

badmemory

They do de-register people from self employed status.  They did me when they brought in simple assessment.  I cannot file self employed now even if I want to.  Income under simple assessment is treated a little differently than under self assessment.  All income streams instead of the usual round down to the nearest £ are added with the pennies included, which makes the massive 20p to 40p difference in the tax take.  So an extra £40,000 tax take.

Hugh_Manbeing

LITGR
Thanks for that reply. So are there three different things (1) UTR (2) registered self employed (3) registered for self-assessment.
And just because I have a UTR doesn't mean I am legally registered as self-employed?

Badmemory
Exactly what they did with me. It's confusing because as far as I'm concerned because having to keep track of expenses, sales and profits is still self-employed by any other name, even if not registered. Nothing's changed in the actual activity. I was keeping my accounts like at any other time.

So I guess the guy at HMRC who told me my old stock doesn't count as business goods any more was wrong - it does. Doesn't it?

Hugh_Manbeing

LITGR
Even though I'm not registered for self assessment the website is still there with my UTR.

vacheron

Hugh_Manbeing said:

I registered years ago before that rule change. Didn't even know about it until after they deregistered me. Just called HMRC and was told the old stock doesn't count as business goods any more as I'm not self-employed officially. I don't know how I can have a UTC number AND not be classed as self-employed. Not sure if the staff know what they're talking about.

Since the £1000 trading allowance was introduced if your only trading income (gross) is less than £1000 it is all covered by the trading allowance. This meant that people who were otherwise in full time work who bought a cheap bolt for £1 with the intention of selling it for £2, didn't have to register with HMRC simply to pay the 20p tax due.

This not only made things easier for the individual, it also made things easier for HMRC hence why they don't currently want your "business". 

As others have said though, as the items were bought with the intention of trading, should you sell them again and recieve income of over £1000 in any tax year, you would be obiiged to re-register. 

Otherwise what everyone (including myself) would do is buy £100K of stock, wait a year to be de-registered, "aquire" the stock from the business as a personal item and then sell it as a personal posession tax free, and if that was permitted I guess thousands would be doing it!