Re: selling cars/when are you a dealer Archived Message
Posted by Peter Warman on November 22, 2009, 12:08 pm, in reply to "selling cars/when are you a dealer"
Hi Mike A bit of a tricky one. From experience you will have to prove to the tax and vat man that they are all for private use and separate from you motor trade business, but that will never happen, one or two vehicles maybe If you get found out, the tax man will want to know how you paid for the vehicles, if you paid for them with your own money and sold a few months later he will just assume you are avoiding tax and vat Remember if you buy a vehicle, and even if you have to fit a new engine, you are still liable for vat on the profit between the buying and selling price, the cost of the engine cannot be deducted from the selling profit By law you are required to keep a record of the price you paid, where the vehicle was purchased from, who it was sold to, the selling price, the profit made and the vat owed on the profit One more point is that if you are not already registered for vat then selling eight vehicles may take you through that threshhold. Plus the tax and vat men are not stupid, they know all the tricks motor traders get up to Keep proper records, DO NOT think you are smarted than the Inland Revenue As I said I speak from experience, all be it a long time ago Peter PS: If you sell the vehicles through the local paper, beware they will keep a record of your phone number, if it flags up 2/3 times a year they will regard you as a trader and you must state this in your ad or you may also fall foul of Trading Standards
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