i have bought a few cars the last few years.(from auctions)
some for friends some i have sold.
i am sure i can make a living out of it but i see a few problems
1 when i buy from an auction they make me fill in the v5, i said i am trading now but they say i need to be buying more,i dont want to buy more if i have to fill in the v5.
2.i thought it would be good to offer warrenties would the company need prof i am a trader.
3.do i need to vat reg. i dont know how much i will be turning over
thanks
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Do a forum search - there was an identical topic to this very recently
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cant you just fill in the bottom part of the v5 aka delaers slip>?
problem with dealing on the side - is often car tax.
im not condoning this - but when i was a student, a house mate of mine would get his insurance with a 14 day cancel - no extra cost (except for the 14 days use) - get his tax - then cancel his policy.
thankfully, he was stopped about 4 months later without insurance.
he has never been without it since.
if your going to take it seriously, get a vat number and get dealer insurance. - not sure who the best is for individual dealer insurance - will have to ask others.
then again - if your buying sub 1,000 grand cars - might be worth just driving them 3rd party on any current insurance?
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This is fraught with hazards. The best advice would be that you don't even think about it. Carry on buying as a hobby, and enjoy it.
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Dear mreerie
From your description it sounds like you are buying your cars from BCA. From what I've heard, BCA are very reluctant to hand over the main part of the V5 to anyone other than bona fide car dealers/traders. You might try the competition.
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Part time trading = Full time hastle. Fron your clients, the tax man, everyone.
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are you saying dont bother with selling cars or just do it privatly.?????
there must be some people trading part time happely
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I think you can trade part-time legally *or* happily. I suspect combining the two is probably a bit of a struggle.
Income tax, insurance, warranties, and the list goes on......
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Nothing is worth self assessment! And if you're working from home then the mortgage lenders, ground landlord, insurers and probably the local authority will want to know. It's difficult to conceal.
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i have bought a few cars the last few years.(from auctions) some for friends some i have sold. i am sure i can make a living out of it but i see a few problems 1 when i buy from an auction they make me fill in the v5, i said i am trading now but they say i need to be buying more,i dont want to buy more if i have to fill in the v5. 2.i thought it would be good to offer warrenties would the company need prof i am a trader. 3.do i need to vat reg. i dont know how much i will be turning over thanks
Hi,
I'm in a similar position to you, in that I want to start trading legitimally (except I'm going to keep it part-time so don;t need to make a career out of it).
VAT registration is required once your turnover exceeds £58k in the past 12 months. (or if you think it's going to be £58k in the next month alone!)
So if you want to avoid registering for VAT, you should be able to do so for at least 12 months.
There are some complicated VAT rules re second hand cars if you are VAT registered, and you should seek advice of a VAT specialist to explain the margin scheme to you.
But basically if you sell a margin car (a car which any of the previous owners have had any private use out of) then you will have to pay VAT on the sales price less the purchase price (i.e the margin)
So buy for £4k
Sell for £5k
Gives £851 profit and £149 VAT
You can't claim VAT on any loss (now you know why the dealers give you a really bad px value but offer a discount on your new car)
You can;t add repair costs to the orginal purchase price to reduce your VAT (but obviously you can reclaim the VAT on repair costs)
So best not register unless you have to.
2) to offer insurance backed warranties (i.e. anyone elses) or finance you will need to be registered with the FSA, which will cost you over a grand.
You could of course just stand your own warranties instead.
1) Wave your motor trade insurance to the clerk at the rostrum, that should convince him you are a trader (and hide the parkers guide when your at the auction!)
Alternatively if you go down the ltd company route as opposed to a sole trader having a company name enfing in car sales / motors and a business bank account should suffice
If you're a sole trader don;t forget to tell the inland revenue that you have gone self-employed.
And find somewhere to store your stock off the road and without annoying neighbours.
James
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Good advice there, James.
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Isn't there also an IR rule about the number of cars you can sell within a year to be counted as a trader as well? Something like 5 or 6 vehicles...
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Isn't there also an IR rule about the number of cars you can sell within a year to be counted as a trader as well? Something like 5 or 6 vehicles...
There is no IR rule, if you buy something with the intention of selling it for a profit, you are running a business.
However whether the IR would consider pursuing you if you only sold half a dozen cars a year is a different matter.
As you would obviously be able to set all your costs against the profit made on the cars so , collection, mileage, repairs, advertising etc would make the amount of tax collectable not worth them bothering.
Mind you if you used the same paper with same phone no. to advertise in all year, buy from the same auction, and if an annoyed neighbour / customer tipped them off maybe so ...
Unfortunatley it is very difficult to set up, and run cheaply, a business due to all the red tape.
I'm having enough fun myself, and I know my way around the tax system!
James
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very good replies.
i think i will keep going as i am and wave the trade insurance about..
if the v5 is not in my name i will have to tell buyers i am a trader.
would they then expect the same rights ???
thanks
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I think you would have to give them the same rights. I'm not sure if it's law yet, but you will be responsible for any faults that develop up tp 6 months after you sell the vehicle. It will be up to you prove the vehicle was fit for purpose. Rather you than me, I think there are easier ways to earn a living.
--
\"Nothing less than 8 cylinders will do\"
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Are you implying that you are currently trading but not telling buyers that you are a trader or that you are planning to do so?
This is illegal and absolutely, buyers will not only expect, but have the same rights as if you were any other kind of trader. That means that the cars you sell must be roadworthy (this applies even if you are not a trader and have reason to believe that the car is to be used on the road), fit for purpose, of satisfactory quality, and as described.
The EU regulation that came into force a couple of years ago puts the burden of proof on you as the trader to show that any fault that develops in the first six months was not present at the time of purchase.
It is a criminal offence to have false or misleading advertising and that includes not mentioning that you are a trader.
Essentially, for a business like this to be viable, you have to price in any costs that arise from the above into the asking price, plus whatever you need to offer as a discount or part exchange over allowance.
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sounds heavy there are a few people doing this .
i would not knowingly sell rubish private or not
but surely people do sell there car when it on it way out
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Take it from me (been there, got the T-shirt), trading in your price range is hard going. There is no such thing as 'part-time' either - when an angry customer rings at 10pm then its not part-time. Not nice trading from home either - if there is any 'unpleasantness' then it happens at your front door. Depending on your part of the country you can meet some very unpleasant buyers too - won't go into details because the mods will remove - but you can imagine the sort of people I mean (esp. if you have an old BM for sale!).
A lot of folks (usually middle-age, middle-class women are the worst, in my experience) will expect a car to be perfect - no matter its age or mileage. Had women bring cars back for a faulty cassette player and small buckle is spare wheel! If you argue then they are off to CAB and Trading Standards and you're on to a loser.
It may sound like I'm a bit prejudiced, but you find out a lot about human nature when selling cars, and its the voice of experience speaking! You wouldn't believe how many people lie when giving you details for a P/X (or how many of the public will 'clock' a car!).
If you buy/sell cars (even a small number) with a view to making profit then you ARE a trader and will be expected to stand by your cars. Pretending to be a private seller could get you into a lot of trouble - you must declare that you're a trader in your ads.
There is a lot to know about car trading (I was involved for 20 years, and my father and grandfather before me!) - most who go into it cut their teeth by working for someone else for a while. The very cheap end of the market is gone completely now - no profit in it. In the mid-price range £2-7k its verycompetitive and a lot of people want finance etc (most of the UK is in hock up to the eyeballs). There are easier ways to make a living. Learn some plumbing skills and do that part time - far more profitable!
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