Selling cars from home - 2nd income
Discussion
HNY to all at Pistonheads
As we start a new year, I’m contemplating selling a few cars from home to add a 2nd income stream, and provide a little fun.
Facts …..
My full time job is work from home office with a few weeks travel per year.
I am fortunate to have a large driveway area that could hold 5/6 cars whilst not inhibiting daily access to our 2 car garage.
I already have 2 first time buyers cars to sell, which were my children’s own cars.
Current salary ~£90k and would want minimum £10k net income after expenses / taxes to make it worthwhile.
I’m aware that house insurance will need advising of any trading activity - liability insurance - trade insurance.
Anyone done similar scale trading from home - interested to hear experiences, positive and negative.
As we start a new year, I’m contemplating selling a few cars from home to add a 2nd income stream, and provide a little fun.
Facts …..
My full time job is work from home office with a few weeks travel per year.
I am fortunate to have a large driveway area that could hold 5/6 cars whilst not inhibiting daily access to our 2 car garage.
I already have 2 first time buyers cars to sell, which were my children’s own cars.
Current salary ~£90k and would want minimum £10k net income after expenses / taxes to make it worthwhile.
I’m aware that house insurance will need advising of any trading activity - liability insurance - trade insurance.
Anyone done similar scale trading from home - interested to hear experiences, positive and negative.
Thanks for replies - all very valid comments and most I had thought about.
My main concerns are
1. Is it actually worth it financially given my tax position?
2. The security aspect, given trading from own family home.
I guess i can sell a small number of personally owned cars per year as private seller. Then declare any gains on self assessment. Maybe this is better way.
My main concerns are
1. Is it actually worth it financially given my tax position?
2. The security aspect, given trading from own family home.
I guess i can sell a small number of personally owned cars per year as private seller. Then declare any gains on self assessment. Maybe this is better way.
Plenty of naysayers on here will make you spend thousand looking at anything from planning, tax, vat, employee liability insurance to god knows what else etc etc etc
Just buy a car and sell it and see how you go. Use temporary insurance or add the car to your policy and work out the rest later
Just buy a car and sell it and see how you go. Use temporary insurance or add the car to your policy and work out the rest later
Remster500 said:
Thanks for replies - all very valid comments and most I had thought about.
My main concerns are
1. Is it actually worth it financially given my tax position?
2. The security aspect, given trading from own family home.
I guess i can sell a small number of personally owned cars per year as private seller. Then declare any gains on self assessment. Maybe this is better way.
Is it worth it? My main concerns are
1. Is it actually worth it financially given my tax position?
2. The security aspect, given trading from own family home.
I guess i can sell a small number of personally owned cars per year as private seller. Then declare any gains on self assessment. Maybe this is better way.
Used cars work on the VAT margin scheme, so unless you're doing really cheap stuff, you can also fall into this trap - margin net of expenses becomes half in your pocket after taxes
clio007 said:
Plenty of naysayers on here will make you spend thousand looking at anything from planning, tax, vat, employee liability insurance to god knows what else etc etc etc
Just buy a car and sell it and see how you go. Use temporary insurance or add the car to your policy and work out the rest later
What you meant to say was "plenty of people who know the rules and who have experience in these matters".Just buy a car and sell it and see how you go. Use temporary insurance or add the car to your policy and work out the rest later
Advocating that people just start doing something without understanding their obligations, responsibilities and duties and the pitfalls is downright idiotic.
Eric Mc said:
clio007 said:
Plenty of naysayers on here will make you spend thousand looking at anything from planning, tax, vat, employee liability insurance to god knows what else etc etc etc
Just buy a car and sell it and see how you go. Use temporary insurance or add the car to your policy and work out the rest later
What you meant to say was "plenty of people who know the rules and who have experience in these matters".Just buy a car and sell it and see how you go. Use temporary insurance or add the car to your policy and work out the rest later
Advocating that people just start doing something without understanding their obligations, responsibilities and duties and the pitfalls is downright idiotic.
Eric Mc said:
clio007 said:
Plenty of naysayers on here will make you spend thousand looking at anything from planning, tax, vat, employee liability insurance to god knows what else etc etc etc
Just buy a car and sell it and see how you go. Use temporary insurance or add the car to your policy and work out the rest later
What you meant to say was "plenty of people who know the rules and who have experience in these matters".Just buy a car and sell it and see how you go. Use temporary insurance or add the car to your policy and work out the rest later
Advocating that people just start doing something without understanding their obligations, responsibilities and duties and the pitfalls is downright idiotic.
I bet you want him to supply a 12 months warranty also when he is selling cars?!
Edited by clio007 on Monday 6th January 10:24
I’d like to see HMRC evidence of the 12 cars per year rule. Remster500 said:
My main concerns are
1. Is it actually worth it financially given my tax position?
2. The security aspect, given trading from own family home.
I'd add a third one; Time.1. Is it actually worth it financially given my tax position?
2. The security aspect, given trading from own family home.
Given you have a 'day-job', you need to factor in the time needed to source, buy, prep, advertise and sell each car. You can break this down into hours. So:
Afternoon at a car auction (including the time getting there and back): 4 hours
Two days to prep the car: t-cut, polish, fix, replace, service, etc: 16 hours
Set up the advert: 1 hour
And let's say you get four potential buyers before you sell it, each requiring half an hour so 2 hours.
And an hour to sort the paperwork: 1 Hour
That's 24 hours of your time. So, there's a couple of questions you need to ask yourself:
1) Do you have that time available? And keep in mind this is for one car.
2) If you make a £500 profit, that equates to around £20 an hour. So consider if it were a job, would be be interested if they paid you £20 an hour?
clio007 said:
What experience do you have in the motor trade specifically buying and selling cars? Based on your post, I would say none at all.
I bet you want him to supply a 12 months warranty also when he is selling cars?!
I'm an accountant who have dealt with clients in the motor trade so yes, I do know a fair amount about it.I bet you want him to supply a 12 months warranty also when he is selling cars?!
Edited by clio007 on Monday 6th January 10:24
Unless you do it on a decent scale - it's just messing about - with pitfalls.
Being on £90k salary but wanting another £10k net puts you into the tapering relief zone above £100k which then disappears above £125k.
You’ll be paying a lot of tax so you’ll want a good margin on each car so you aren’t trading loads with the associated hassle.
Obviously big margins tend to come with big up front so you should be thinking about either lost interest on the tied up cash or whether you can get credit on acceptable terms.
I can’t see it being worth doing when you are already on £90k.
You’ll be paying a lot of tax so you’ll want a good margin on each car so you aren’t trading loads with the associated hassle.
Obviously big margins tend to come with big up front so you should be thinking about either lost interest on the tied up cash or whether you can get credit on acceptable terms.
I can’t see it being worth doing when you are already on £90k.
bristolbaron said:
Eric Mc said:
No such rule.
Quite! My understanding is you might get away with selling a few if you bought them with the intention of ownership, but even buying one solely to make a profit could be declarable? On a separate note, you have a PM..
It would be hard to prove you were a business with one sale
With 5 or 6 in quick sucession...
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