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Forum - Personal or business transaction ?

Personal or business transaction ?

Tue, 17/11/2009 - 21:33 — mowerman

Are there HMRC regs to determine whether a seller is acting in an ocassional private manner or as a trader for profit or gain? For example if I sell my car every three years I'm acting in a personal capacity but is I sell half a dozen cars a year I'm behaving as a business. What is the threshold?
Specifically can anyone point me to the reg or appropiate law.

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Mike Durlston's picture

If you are buying cars to sell for a profit you are liable for tax on those profits (your cars bought three years before sale are most likely sold for a loss so therefore no profit to tax). You will need to consider also the need of a trader's licence, and VAT implications if income exceeds that threshold. You could seek advice from your local Business Link. See www.businesslink.gov.uk for your local branch. Or of course contact your local tax office. See www.hmrc.gov.uk. Alternatively seek advice from your porfessional advisers - lawyer or accountant.

Wed, 02/12/2009 - 11:46 — Mike Durlston

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