How does Tax work when you sell personal stuff?

[Noxis]

If "for example" you got given a car for whatever reason (mate or family member moving to Auz and they give it to you). You then sell that car for something like £3k - £4k.

Where do you stand in the eyes of Capt TaxMan? Do you have to do some kind of self assessment in March and then pay 22% of the money to Gordon Brown just for the privilege of living in the UK?

Equally what about if you sold your computer second hand and its some kind of UBER rig with quad core and SLI so its sold for £3000? Again with anything that you might be able to sell for a large sum of money (garden equipment, living room furniture etc...)?

 

[furnace]

I think second hand is tax-less.

Even if it wasn't, I still wouldn't tell the tax man or do a self assessment. I'd rather live on the edge and avoid the tax Chances of getting caught are much slimmer than they want you to believe.

 

[Hate]

I think second hand is tax-less.

Even if it wasn't, I still wouldn't tell the tax man or do a self assessment. I'd rather live on the edge and avoid the tax Chances of getting caught are much slimmer than they want you to believe.

nice sig, but PMs are disabled on this forum and so is that kind of advertising

 

[Paramount]

SIG POLICE..DEPLOY!!

 

[Defcon5]

SIG POLICE..DEPLOY!!

 

[Noxis]

Thanks for the de-railment guys

 

[beamer]

When selling any item second-hand you pay no tax on that "income". You already paid the (far too much in my opinion) tax of 17.5% (VAT) when you first bought the item. Exactly the same applies to selling second-hand goods on EBay etc ..., you do not have to know the person you are selling to, beyond the requirements to successfully complete the transaction.

Equally, the buyer of second-hand goods pays no tax either.

Of course, GB would love to be able to tax every transaction, from both sides, where items are being sold second-hand, but the logistics involved and the ease with which it would be avoided, make it unworkable - which is probably why VAT is so high in the first place.

 

[Noxis]

When selling any item second-hand you pay no tax on that "income". You already paid the (far too much in my opinion) tax of 17.5% (VAT) when you first bought the item. Exactly the same applies to selling second-hand goods on EBay etc ..., you do not have to know the person you are selling to, beyond the requirements to successfully complete the transaction.

Equally, the buyer of second-hand goods pays no tax either.

Of course, GB would love to be able to tax every transaction, from both sides, where items are being sold second-hand, but the logistics involved and the ease with which it would be avoided, make it unworkable - which is probably why VAT is so high in the first place.

Ah thanks for the info. I vagualy knew that Just checking.

 

[Briton]

What about selling cars? Isn't there some rule that if you sell more than 5 in a year you can be classed as a dealer?

 

[Beansprout]

SIG POLICE..DEPLOY!!

Deployed

 

[Azagoth]

From what I understand, if you're making a living by buying and selling on that well know auction site then you have to declare it. If you're just clearing out your house/garage and flogging all your old junk, cars included, then the taxman doesn't need to be told as there's quite a bit of leeway when it's second hand goods.

 

[beamer]

From what I understand, if you're making a living by buying and selling on that well know auction site then you have to declare it. If you're just clearing out your house/garage and flogging all your old junk, cars included, then the taxman doesn't need to be told as there's quite a bit of leeway when it's second hand goods.

It's slightly more complicated. This article covers it pretty well : http://www.thisismoney.co.uk/tax-advice/income-tax/article.html?in_article_id=403156&in_page_id=77

The fact is this is capital gains, so it is only applicable when you sell an item for more than you paid for it, and then only once you make a sufficient amount of extra money.

An example, assuming I am understanding correctly ...

It you buy a mobile for £100 and are lucky enough to sell it on for £110, then you have achieved £10 of capital gains. You would have to make 850 (giving £8500) such transactions before you have to inform the tax man, and then have to pay capital gains tax on all the amount above that. I think the "chattels exemption" would also increase that amount to £14500 (£8500 + £6000) in certain situations.

Of course, with the majority of second-hand stuff sold on ebay, you are very unlikely to sell an item for more than you originally paid for it, unless you are lucky. Antiques, classic cars, rare items in general (e.g. Wii consoles at the moment) are a different story. I would certainly be interested to see how many of the people flogging numerous Wii consoles on ebay for up to 3 times what they paid for them, declare their capital gains to the tax man.

The tax man is realistic about this too - they don't get interested until the amount of potential tax they could obtain is sufficient to covers the costs of proving it should be paid, administrative costs of processing the payments etc ...