How did you start ? and what did it take?

With regards to tax and law etc, ive read that you can trade up to 52k a year before paying tax (profit or turnover?) and how do you register a company.

Can you trade from home? when can you use the part of the log sheat that doesnt need posting off?

How would it work tax wise working full time and trading part time?

Sorry for all the questions fired off, but I needed to get them written while I could remember them!

 

My old man's had various premises since long before I was born. I've bought and sold cars/bikes and just about anything I can get my hands on [except drugs!] on top of other jobs since I was 15.

After joining the graduate stream and being bored shitless for a few years, I fucked off travelling came home to get another job about 3 years ago and my dad decided he wanted to retire. He also promised me all his riches.

So far neither has happened

That would be fucking awesome if only it were true Would LOVE to see where you got that from??

You have to pay tax on ALL your earnings [over and above your normal tax code/threshold]. You don't have to pay VAT until your turnover exceeds £67k

Of course you can! Might be best to have either a big enclosed driveway and/or understanding neighbours though!

If you buy a car from someone and let them know you're trade, you let them keep the red part? When you sell a car, it's your responsibility to send the Log Book off with the new owner's details.

Get a good accountant you can trust. SOME people may advise you not to declare any extra income over and above your normal full time job as it would be at 40%. These are probably the same people that would shop you in if you started earning well out of it

 

Paddy - Great info thanks for the answers, logsheat wise do you need to be vat registered to use the trade part? and im assuming you can register you property as business premises?

Basic question but... how do you register a company?

 

What do you need to register yourself for? Only start thinking about that sort of thing when you bust £67k and need to register VAT. The VAT on car dealers is worked out differently to just about any other business as we pay VAT on profit. It's a pain in the arse!!

The only thing you really need is proper insurance. Some of these smaller policies are good value but will have restrictions.

You do not have to be registered with anything or anyone to call yourself a trader and to retain the whole of the V5 except the red slip AFAIK!

I'm not sure which comes first as the old boy has had trade plates for donkeys years BUT I'm 99% that you need insurance before you can get them. iirc they USED to come and inspect the premises but the best place to ask is your local DVLA because there's so many people without trade premises nowadays there must be a way around it!

 

If you want to start paying Taxes almost immediately [iirc you get like a year before they calculate it], going against the advice that some people may give you [are you picking up on my subtle hints yet? ], you can ring HM customs and excise and let them know what you plan to do.

I am 100% positive they will fall over themselves to send you the right information and forms so that you can start paying them more Tax.

 

Pady - I get what your saying mate, but for me I think Legit would be the only option tax wise, do not want to get stung. Plus I would only do it part time so my car turnover wouldnt get near 67k.

 

Your best bet mate is to contact the lovely people at the Tax office and they'll send you all the information out.

They'll ask you what you plan to do and keep a record of that iirc.

It may be worth opening a business account with your bank so you can get a cheque book and try and blag trade discounts at places?

I do the occassional one or two from home and use the Autotrader. You get the option of private or trade advert. The trade one is a bit cheaper I think and you don't have to put any trade details in. In the online form for each car it asks for a business name for the advert but I normally just put a full stop in the box and have never had a problem.

If you plan to use auctions, you will need to register with them before hand to be able to get the full registration documents. That's where the insurance and chequebook would come in handy but I'm not sure what else they'd need? Maybe print some invoices off with your address on too?

In fairness, the old boy has pretty much had everything set up for so long I'm only really going on common sense here... but I imagine searches and checks will be more thorough if you're applying for a credit line!

 

Ah Men to that! Sums up life

 

If you register your home as business premises there is a danger of becoming liable for Capital Gains Tax on any profit when you sell.
You would also have business rates to pay, the Council would expect you to apply for change of use and could easily refuse permission, and your deeds may prohibit it anyway.

Many Councils have by-laws where you have to register with their Trading Standards people before trading cars, and they can and will enforce the rules.

You are obliged to register as self-employed within a certain period (can't recall if it is 30 or 90 days, but it's certainly not as long as a year).

 

Would a rented lock up be good enough (possible) to register as business premises?

And how much are you guys paying trade insurance? Would it mean I could use the policy on private cars as well?

Please excuse my ignorance and thanks for all your replies!

 

why would you want to become a trader in this day and age? i dont think there is much money in cars right now.

 

to be honest im not intentionally doing it, but the amount of cars I go through either out of boredom or because I buy spares/repairs cars is becoming quite a few!

 

Exactly what i was going to say

The car trade is dead and altho im still going i 100% wouldnt want to start from scratch in any part of the motor trade these days , you will find that ebay and people selling cars at the side of the road will undercut you by a mile , The only way you can make money these days is by doing it on the side and dodge paying any taxes etc , but be aware if you get caught your fucked

Paul

 

Paul - I do want to do it, I dont want to get caught. So my only option is legit. All the cars I have done (not intentionally trading) ive done well on, so hence my questions.

 

i was tradeing from home for two years. it has it ups and downs. if you want trade plates then you have to be vat reg. its not a easy as people think. i started with 6k buying cars from ebay piston heads. but you always have a worry when xmas comes and as for the climate now no trader is saleing times are hard no ones buying. your best bet is to have a full time job and do it on the side.