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)