Selling/Business

[NH]

Not sure if this is the right section for this question, but I'll press forth anyway. At what point does selling items become a business, as opposed to a long-term car boot sale? Is it a certain level of money changing hands, or is selling two identical DVD players (because they've become a coherent commodity) the threshold?

[Buenchico]

Basically, it comes down to where and why you obtained the goods you're selling.

I'm sitting at my desk surrounded by piles of books (and other items) which I'm putting together to sell at a car boot sale (or, more realistically at this time of the year, at an indoor table-top sale). Everything which is piled up is something I bought for my own use and I no longer require. (e.g. there are books which I've read, clothes which I no longer wear, etc). If I sell these at a car boot (or table top) sale, the tax man would not regard me as a trader because these are all genuinely 'personal' items. It wouldn't matter how many sales I attended in order to sell these items. Neither would it matter how much money I made from them.

In the past, however, I've bought items from auctions and sold them through boot sales, antiques fairs, etc. Every one of these items was bought for the purpose of being re-sold at a profit which means that, as far as the tax man was concened, I was operating as a trader every time I made a sale. (And yes, I did declare it).

In summary: You can sell genuinely 'personal' items as often as you like (and for as much as you can get for them) without becomig a 'trader'. As soon as you sell something which you bought for the purpose of re-selling, HMRC will regard you as a trader and your income from the sale becomes taxable. If you're already in employment which uses up your tax allowances, that means that means that HMRC are entitled to 22% of all your profits (or even more if your combined income places you in a higher rate tax band).

Chrs

[NH]

Thanks. Good answer.

[Ethel]

But don't forget - if you are already paying taxes and register as a trader because you buy to sell, you can lower your tax bill if you make a loss.