Paying tax on used car sales?

Jizzer28

I am considering getting into the car sales business i was wondering do i have to register for vat or can i sell them privately and keep any profits, my understanding is i can do this and i dont have to pay any tax, anybody in the business who knows?

please no silly opinions or anything like that im looking for some real knowledge, thanks guys.

Gambler

If you want to do it legally then like any other business you need to be registered for VAT if your annual turnover exceeds a threshold. Also a quick search brought me up this page which appears to outline the requirements to legally trade vehicles:

http://www.revenue.ie/en/tax/vrt/leaflets/authorisation-motor-traders-section-136-finance-act-1992.html

Jizzer28

thanks but the link didnt answer my question really, what i really want to know is if i can sell my own car and make some money i dont have to pay tax, so in theory could i not do this on a slightly larger scale like two or three and avoid tax? is this not a private matter? I do plan to go full scale as in a premises and vat registration etc eventually but want to build up slowly organically, i should just go ask an accountant or solicitor really i guess

J.Ryan

If you are registering as the owner on each transaction, then eventually you will be found out as multiple car ownerships (& Sales) would trigger something (or should anyway).


If you are not registering as owner, then, you are trading.

J.Ryan

Oh, after you register for VAT, watch out for a thing called the clawback, it can be a pain.

dollydishmop

Happy to be corrected...but I believe that once you get into the realm of purchasing goods (ie cars) with the sole intention of selling them on, then any income from that is taxable.

Sorry if that bursts your bubble.

Gambler

If you are buying products to sell on at a profit then it's a business. Businesses can't just make money without paying some sort of tax along the way.

You could buy and sell cars from home but it's not a private transaction if you are doing it for profit as you describe. Also to quote the page I linked to:

In addition it is now a requirement that the premises must be one "at which such business may legally be carried on ". This excludes premises, such as front gardens or driveways, or other places where the carrying on of the business is not permitted under the planning laws. The premises must be one from which it is legal to carry on a business.

Gambler

Oh and I can tell you that one of our neighbours was doing something like this, selling cars from his house, and he was reported by someone on the street. Got in big trouble for it from what I heard and hasn't done it since. All it takes is one pissed off neighbour and you could find yourself paying for it..

Jizzer28

cool beans guys thanks for the info much appreciated, ill take it under advisement

antoinolachtnai

If you buy a car for your own use and then sell it at a profit, you are still liable for capital gains tax, I would think.

dollydishmop

antoinolachtnai wrote: »

If you buy a car for your own use and then sell it at a profit, you are still liable for capital gains tax, I would think.

According to this link, private motor cars are exempt from Capital Gains Tax...happy to be corrected

http://www.citizensinformation.ie/categories/money-and-tax/tax/capital-taxes/capital-gains-tax

antoinolachtnai

Depends on the value of the chattel apparently.

http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-and-corporation-tax/part-19/19-07-02.pdf

Not my area of expertise however and it would be as well to consult an adviser before embarking on your avoidance scheme. Citizens information is not a good source for tax advice.