Hi all,
With a six month break before starting a new job, I'm keen to spend the Spring/Summer buying and selling some cars for profit.
The general model would be buying certain types of car in areas of the country where they're cheapest (or from dealer forecourts), and delivering them to a friend at home, who would advertise and sell.
My target is to buy and sell 1 or 2 cars a week in this way - but I'm confused about the legalities.
If someone could answer some or all of these questions, I'd be really grateful -
a) Presumably I need to declare myself as a "Motor Trader". Is this as simple as completing the relevant part of the V5 form in each case, or do I need to pre-register with some central body?
b) How can I check on what rates of tax, national insurance and VAT I'd be liable for?
c) How does the DVLA or the Inland Revenue detect if you're buying and selling cars for profit?
d) What's the best solution for insurance?
e) Am I obliged to offer some form of warranty, or can cars be "sold as seen"?
f) Any useful sources of advice/info out there?
Really appreciate any help.
Cheers
Russell.
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Thers plenty of info, similar posts in the archives, but to save time, heres what you need to know.....
just enjoy the break from work, do some decorating/gardening/helping old folk/walk the dog....but don't waste your time with motors!!
Then again, you MIGHT just earn a few £$£$, if you don't bother about any rules & regulations!!
Best of luck!!
VB
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a) as far as i'm aware, there is no central body which keeps a register of traders. Your local trading standards will keep a register however, whether you want to be on this depends on how seriously you'll be taking it.
b) You'll need to register as self employed. This will involve paying £2 a week as your NI contributions, then tax on your profits. You need to see an accountant really. If your turnover is more than £56,000 a year, then you need to become VAT registered. more info is on the VAT site, but you may not need to worry about it if you're only trading for a few months.
c) You'll be filling in the "motor trader" part of the V5, so the DVLA will find out that way. As for the Inland Revenue, you only need one unhappy punter to grass you up and you've got problems. If you're only trading for a few months, you may get away with it, you may not. Wouldn't risk it myself.
d) Motor trade insurance - suprisingly cheap, and can cater for small "working from home" operations as well.
e) As a trader you are required to comply with the Sale of Goods Act, which is too long to go into here, but local tradings standards will happily help you out. Basically there is no obligation to sell a car with an official "warranty" as such, but you have an obligation to repair any faults that arise within a "reasonable" time. A reasonable time is dependent on the typ and value of vehicle, so it's all quite vague. You can buy insurance-backed warranties to cover yourself for any major damage that may occur, but they will not necessarily cover everything that you may be expected to sort out.
f) This website, obviously! I've just set up as a trader and have asked loads of questions on this site, so have a search around, there's some really useful responses.
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'c) You'll be filling in the "motor trader" part of the V5, so the DVLA will find out that way. As for the Inland Revenue, you only need one unhappy punter to grass you up and you've got problems. If you're only trading for a few months, you may get away with it, you may not. Wouldn't risk it myself.'
Keep a good record of all expenses, including a SENSIBLE proportion of household costs (electricity, rates etc - but beware of having to pay business rates...). [No need to worry about CGT on your house, as it's for less than 3 years.] When you go back to work, tot it all up, and if it's a profit, rejoice and be happy to pay tax. If it's a loss, you may be able to offset the loss against your other income to reduce your tax bill - and think of all the fun you'll have had, and the dodgy people you'll have met.
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You also need to take a training course. You can do some homework for it now.
1/ Find a cripple and kick his crutch away.
2/ Steal an ice lolly or sweet from any small child (and grin when they cry)
3/ Help an old lady on the bus and deliberately leave her shopping at the bus stop, wave cheerily at her as the bus drives away. (if you can filch her purse from her pocket as you do, you dont need the training course.)
Having done all that you should be ready to join the ranks of the used car dealer.
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