I’m around 6 years off early retirement which I see will be a comfortable time, I’ve done my graft since aged 16, paid all my taxes into the system, a big part of my adult life has consisted of just buying records, from within the UK and on trips to the States, I’d be interested as a sideline, seeing as I could easily fund it, a term selling records, but was just wondering what are the borders of doing it as say a hobby (odd sale via ebay) or as an enterprise, I realise that the tax authorities want their pound ( and quite right, I loathe any benefit cheat etc ) but where does it become a going concern other than a hobby where you get a few quid here and there, to being a business where you must pay your way.. Any guidelines from those who already undertake such avenues.

Cheers

 

Brett

 

I Think you edit out about benefit cheats out as it may offend people imho

 

regards 

 

Kev 

Edited March 17, 201312 yr by Kev John

  On 17/03/2013 at 18:14, Kev John said:

Brett

 

I Think you edit out about benefit cheats out as it may offend people imo

 

regards 

 

Kev 

 

 

But Kev, why ?..anybody who cheats the benefit system is doing it via illegal activities...why would i edit it out, or why would you suggest such a thing...If it offends people who cheat this country i'm glad , i've only ever paid into the system..What part of that offends you ?

  On 17/03/2013 at 18:18, Brett F said:

But Kev, why ?..anybody who cheats the benefit system is doing it via illegal activities...why would i edit it out, or why would you suggest such a thing...If it offends people who cheat this country i'm glad , i've only ever paid into the system..What part of that offends you ?

Because you asking for advice on selling your records when you retire and you should keep it simple 

 

i was accused of this 13yrs ago after being finished from work on ill health grounds & i did'nt like it was very upsetting for me & my & family & i was't doing anything illegal either

 

atb kev

Edited March 17, 201312 yr by Kev John

  On 17/03/2013 at 18:26, Kev John said:

Because you asking for advice on selling your records when you retire and you should keep it simple 

 

i was accused of this 13yrs ago after being finished from work on ill health grounds & i did'nt like it was very upsetting for me & my & family & i was't doing anything illegal either

 

atb kev

 

Kev, for those very reasons you suffered i'm asking what are the guide lines for selling records without suffering tax evasion laws..

  On 17/03/2013 at 18:36, Brett F said:

Kev, for those very reasons you suffered i'm asking what are the guide lines for selling records without suffering tax evasion laws..

I think it's 9k per annum 

 

there was a thread on hear a few weeks back brett someone will put you right on here 

 

Kev

  On 17/03/2013 at 18:41, Kev John said:

I think it's 9k per annum 

 

there was a thread on hear a few weeks back brett someone will put you right on here 

 

Kev

 Thanks Kev, i have people who are involved in the tax system, but thought i'd go to the nerve centre, any business must pay it's way. i'm a strong believer in that and feel no sorrow for those that avoid such lines. Thank you once again.

When I lost my job I used to sell a few records here and there to try and get a bit more cash in to live on, we're talking about 1994 to 1996, someone grassed me up the dole that I was doing it for a living and they made me produce 2 years worth of bank statements (they had to pay for that to be done) anyway they couldn't find any time in that period where I was actually in the bank and the amounts were so piddling that the case was dropped immediately - but only after causing me massive stress.  So my then partner convinced me that if I went about it the right way, there was probably some money to be made, so I sold my entire collection and with the money, I bought another one, then I sold that, and after about 6 months we registered it as a business.  That was 16 odd years ago, it's been great and it's also been terrible, highs and lows like any other business, some weeks you make decent money, other weeks you don't make any money at all, last year there was a three week period where I had no income whatsoever.  Also it might look like I turn over an awful lot of records/money going by my sales on here, but nearly all of those sales are for other people so for every hundred quids worth of records sold, I earn £20.  Which of course makes me work harder to try and sell more for other people.

If I were you Brett, just test the water, put a list out once or twice a month, if you make money then it would be a nice little sideline to top up your retirement pension, I don't know if it would be worth registering it as a business, why shouldn't you be able to sell your own property, after all, you already paid tax on it in the first place.

  On 17/03/2013 at 18:55, Pete S said:

When I lost my job I used to sell a few records here and there to try and get a bit more cash in to live on, we're talking about 1994 to 1996, someone grassed me up the dole that I was doing it for a living and they made me produce 2 years worth of bank statements (they had to pay for that to be done) anyway they couldn't find any time in that period where I was actually in the bank and the amounts were so piddling that the case was dropped immediately - but only after causing me massive stress.  So my then partner convinced me that if I went about it the right way, there was probably some money to be made, so I sold my entire collection and with the money, I bought another one, then I sold that, and after about 6 months we registered it as a business.  That was 16 odd years ago, it's been great and it's also been terrible, highs and lows like any other business, some weeks you make decent money, other weeks you don't make any money at all, last year there was a three week period where I had no income whatsoever.  Also it might look like I turn over an awful lot of records/money going by my sales on here, but nearly all of those sales are for other people so for every hundred quids worth of records sold, I earn £20.  Which of course makes me work harder to try and sell more for other people.

If I were you Brett, just test the water, put a list out once or twice a month, if you make money then it would be a nice little sideline to top up your retirement pension, I don't know if it would be worth registering it as a business, why shouldn't you be able to sell your own property, after all, you already paid tax on it in the first place.

 Thank you Pete, sound advice.

Why not look for generic advice from the tax people themselves? If you are just exploring this and want to do thing by the book - which is what it sounds like - they would be the best people to ask.

 

HMRC website should have the rules they work to. Or phone them.

 

This will tell you what you need to know - how you need to register as a business and in what capacity - how much you can earn before being VAT liable etc.

 

Cheers

 

Richard

 

P.S. I have always found them very helpful when I have spoken to someone. They help cut out all the stuff you can then ignore in the long and complex paperwork, and also explain things in simple way so you can understand it.

Edited March 17, 201312 yr by Premium Stuff

  On 17/03/2013 at 19:25, Premium Stuff said:

Why not look for generic advice from the tax people themselves? If you are just exploring this and want to do thing by the book - which is what it sounds like - they would be the best people to ask.

HMRC website should have the rules they work to. Or phone them.

This will tell you what you need to know - how you need to register as a business and in what capacity - how much you can earn before being VAT liable etc.

Cheers

Richard

P.S. I have always found them very helpful when I have spoken to someone. They help cut out all the stuff you can then ignore in the long and complex paperwork, and also explain things in simple way so you can understand it.

Thank you Richard I will do that

round 6 years off early retirement which I see will be a comfortable time, I’ve done my graft since aged 16, paid all my taxes into the system, a big part of my adult life has consisted of just buying records, from within the UK and on trips to the States, I’d be interested as a sideline, seeing as I could easily fund it, a term selling records, but was just wondering what are the borders of doing it as say a hobby (odd sale via ebay) or as an enterprise, I realise that the tax authorities want their pound ( and quite right, I loathe any benefit cheat etc ) but where does it become a going concern other than a hobby where you get a few quid here and there, to being a business where you must pay your way.. Any guidelines from those who already undertake such avenues.

Cheers

Edited March 18, 201312 yr by fuzzj

whatho mate it's simple really you pay tax on profit if it's a small side line you may have to find a few bob but so what we all have to pay tax whether were selling records or chips.The first thing is to study the tax laws , for instance to pay fuel costs on purchase receipts (say £20.00 per week) and car repares or do milage rates milage rates are better as for me this weekend i've put £20.00 in the truck for diesel but my mileage has been two trips to Nottingham and the milage rate works out more on my allowance than £20.00 plus i put down mine and Paula's entrance fees of two nights and two lot's of meal allowance roughly with record sales minus expencises I've made a loss.Plus on a yearly basis there is cloathing allowance and timing your buying right towards the year end you won't pay a great deal of tax.Add on postal costs ect you may well get a tax rebate if you get a small enough income you may be able to claim tax credits which would boost your income to a livable level.It's just a question of studying the tax laws. Regards Simon.

Simply put you sell records. Deduct any expenses and cost of stock. Say you had £20,000 to declare after that. Take off your tax allowance - is it around £8000 ?  £12,000 to pay tax on at 20% which would be £2400.  Your income would be £17600 per annum from record sales.

 

Making below your tax allowance you would add total to pensions for total income and you'd be taxed on the two added together.

 

Very rough guide

 

Oh and if your combined income from pensions and sales is over £34370 then you'd enter 40% tax rate but only on monies above that figure

 

ROD

If they are your own records consider taking soome to soul nights and selling for cash as that can go in your pocket

Brett,

If all you're doing is buying and selling records as a hobby, (i.e. record collector), then there should be no problem as far as HMRC is concerned and no need to register as a business.

 

If you're buying and selling records with a view to making a profit then you're trading/in business and HMRC would expect you ro register and pay tax on any profit.

 

If you register as a business with a view to making a profit doesn't necessarily mean that you'll actually make one! After adding up all your receipts and deducting your expenses, (if operating as a business HMRC will expect you to keep full business records of your trading activity), you've made a loss, under current tax law, you can claim relief for the loss against your other taxable income! Nice, but it doesn't go on indefinitely. HMRC can argue after a few years of continued losses that you're actually "hobby trading" with no intention of making a profit and so deny tax relief against other sources of income!!

 

Above I think is a summary in most simplistic terms but there's can be a fine line, especially with records, between hobby and business trading.

 

To most of us on here if all we're doing is buying records, eventually selling them and investing the proceeds into even more vinyl, for our own use, then there shouldn't be a problem.

 

Sharmo,

I think you're wrong about there being an annual clothing allowance, so be a bit careful on this! After all why would a record dealer need specific clothing to trade in records? Surely you dress in your "day to day clothes" when you're dealing records, (altough I appreciate you may dress up a little more stylish when you're out a do in the evening)

Edited March 17, 201312 yr by Stubbsy

Brett,if you ever wanna slip in some from your own collection ,let me know fella    . You know which ones

 

Good luck with the venture.

As far as I'm aware, selling personal chattels from time to time does not of itself amount to trading activity for tax purposes.

 

I would be inclined to see how you go first and wouldn't register with HMRC unless and until the level of activity / volume of sales reaches "the point" where it would be seen as business activity to a reasonable person.

 

HMRC issue statements of practice on their website on stuff like this but they would prefer to know about it from the off regardless of how successful it might or might not become..........but they bend the rules to suit so I would start on the footing that its incidental / occasional and not a regular activity or means of income.

 

I know a bit about revenue law but little to f*ck all about being a record dealer!!!

 

Good luck anyway   

  On 17/03/2013 at 21:40, Stubbsy said:

Brett,

If all you're doing is buying and selling records as a hobby, (i.e. record collector), then there should be no problem as far as HMRC is concerned and no need to register as a business.

 

If you're buying and selling records with a view to making a profit then you're trading/in business and HMRC would expect you ro register and pay tax on any profit.

 

If you register as a business with a view to making a profit doesn't necessarily mean that you'll actually make one! After adding up all your receipts and deducting your expenses, (if operating as a business HMRC will expect you to keep full business records of your trading activity), you've made a loss, under current tax law, you can claim relief for the loss against your other taxable income! Nice, but it doesn't go on indefinitely. HMRC can argue after a few years of continued losses that you're actually "hobby trading" with no intention of making a profit and so deny tax relief against other sources of income!!

 

Above I think is a summary in most simplistic terms but there's can be a fine line, especially with records, between hobby and business trading.

 

To most of us on here if all we're doing is buying records, eventually selling them and investing the proceeds into even more vinyl, for our own use, then there shouldn't be a problem.

 

Sharmo,

I think you're wrong about there being an annual clothing allowance, so be a bit careful on this! After all why would a record dealer need specific clothing to trade in records? Surely you dress in your "day to day clothes" when you're dealing records, (altough I appreciate you may dress up a little more stylish when you're out a do in the evening)

need work boots mate and coat and jeans alway's been accepted by the accountant and inland revenue have never raised it with me so far regards Simon.

Bit of boring legal stuff for you....

 

"when deciding on whether or not a person is trading it is necessary to distinguish between trading activities (which give rise to trading profits)

and non-trading activities (which give rise to capital gains)

 

The statutory definition of "trade" includes "any venture in the nature of trade" ( s. 989 Income Tax Act 2007)....which is not very helpful....so you have to look at case law.

 

Case law looks for what the courts call "the badges of trade"....namely, the subject matter of the transaction / the duration of the period of ownership of "stock" / the frequency of transactions / supplementary work on the asset / the reason for sale / profit motive. "

 

Bottom line is its a very subjective test and if a tax payer sells a type of asset which might normally be acquired for personal enjoyment this may suggest that any profit arising from the sale should be treated as a capital gain rather than a trading profit.

 

The disposal of a chattel for £6k or less is exempt from Capital Gains Tax......plus you have an annual CGT allowance of £10,600.00 and then the typical rate of 18% kicks in on non-exempt gains over that threshold.

 

This is obviously just generic information and you need specific professional advice to suit your own situation.

 

Hope this helps.................and if not..............sorry for boring you!!   

Edited March 19, 201312 yr by back street blue

a pal o mine who has been selling records for ages is grumbling a lot lately as he doesnt do as well now as he used to. 

he mostly sells at records fairs on the continent ,as thats where the main market is so he says .

he does little business in the UK now.

he has several large warehouses and lockups full of vinyl and his house has records in every room, so he is not short of stock .

a rummage through his mixed piles makes your eyes pop out such is the diversity of his stock ,which he will never sell till his dying day .

so he muddles away on fairs and ebay but quite honestly he isnt rich .

and his address is ? Just out of interest

 

 

Swifty

Edited March 19, 201312 yr by SWIFTY

  On 18/03/2013 at 21:54, sharmo 1 said:

need work boots mate and coat and jeans alway's been accepted by the accountant and inland revenue have never raised it with me so far regards Simon.

a white coat or a straight jacket lol lol

  On 18/03/2013 at 21:54, sharmo 1 said:

need work boots mate and coat and jeans alway's been accepted by the accountant and inland revenue have never raised it with me so far regards Simon.

 

Sorry but why would you need work boots to sell records?

We all need a coat and jeans, doesn't mean we can claim tax deduction on them though!

Mind you a guy I knew once told me he'd included the receipt for a Wendy House he'd bought for his young daughter with his accounts records and his accountant never queried that

  On 19/03/2013 at 21:54, Stubbsy said:

Sorry but why would you need work boots to sell records?

 

You've obviously never dropped a box of records on your foot

  On 20/03/2013 at 07:43, Dave Rimmer said:

You've obviously never dropped a box of records on your foot

 

Expect to see you at Cleethorpes in your steel toe caps then Dave

  On 19/03/2013 at 21:17, sceneman said:

a pal o mine who has been selling records for ages is grumbling a lot lately as he doesnt do as well now as he used to. 

he mostly sells at records fairs on the continent ,as thats where the main market is so he says .

he does little business in the UK now.

he has several large warehouses and lockups full of vinyl and his house has records in every room, so he is not short of stock .

a rummage through his mixed piles makes your eyes pop out such is the diversity of his stock ,which he will never sell till his dying day .

so he muddles away on fairs and ebay but quite honestly he isnt rich .

Would this be Tony @ Vinyl Tap in Huddersfield - know he has a few warehouses - although told he is in the process of cancelling lease on one of those now.

Strong power seller on Ebay .

  On 19/03/2013 at 21:54, Stubbsy said:

Sorry but why would you need work boots to sell records?

We all need a coat and jeans, doesn't mean we can claim tax deduction on them though!

Mind you a guy I knew once told me he'd included the receipt for a Wendy House he'd bought for his young daughter with his accounts records and his accountant never queried that

well mate I wouldn't want to drop any of the box's on my feet agian as last time broke my toe and chipped a piece off my foot.Secondly in argument as it's classed as working and I'm in the work place (Health and safty type thing)Jeans are tough wearing and are also work clothes and we all need a coat mate regards Simon.

  On 20/03/2013 at 15:31, sharmo 1 said:

well mate I wouldn't want to drop any of the box's on my feet agian as last time broke my toe and chipped a piece off my foot.Secondly in argument as it's classed as working and I'm in the work place (Health and safty type thing)Jeans are tough wearing and are also work clothes and we all need a coat mate regards Simon.

 

I can honestly say I've never even thought about claiming for clothes etc.  Knees on my jeans always wearing out.

Dont you know us public servants all get clothing allowances for our bowler hats and kipper ties?

 

 

Grant. One bit of advice, tho it may be an obvious one. Get a record/receipt for every purchase you make, so you can have prrof of the profit magin. I know of a guy who bought a shed load of comics from Japan. He sold them on and made a reasonable profit. But was hit for a tax bill on the sale price. He couldnt prove that he paid whatever it was.

He was lucky that he didnt actually lose money, but in the end he barely took enough profit to buy a pint.

  On 20/03/2013 at 15:51, Pete S said:

I can honestly say I've never even thought about claiming for clothes etc.  Knees on my jeans always wearing out.

Pete I've claimed these thing's for years one pair of each though,bugger all to what mp's claim although i was thinking of a duck house regards s.

budget update, looks like you will be able to legitimately earn the first £ 10,000 tax free soon.