We all sell the odd item from time to time.  But when does this stop being a personal transaction and start being a trade (creating the requirement to register for Self Assessment and paying taxes on any profits).

HMRC does not have clear guidelines but instead gives the vague guidance below

You’re likely to be trading if you:

  • sell regularly to make a profit
  • make items to sell for profit
  • sell online, at car boot sales or through classified adverts on a regular basis
  • earn commission from selling goods for other people
  • are paid for a service you provide

Ask yourself this – when you bought the item you are selling what was your intention for it.  To make a profit by selling it (trade) or to use it yourself with no regard to its resell value (buying a product to ultimately sell but having personal use until you sell it could still be a trade).  Also, is it something that you can see yourself doing regularly?

Trust your instincts – you will know your intentions and be best placed to realise your trading (even if you think it is just a hobby).  As soon as you are “trading” you need to register for Self Assessment.  You also need to consider the tax implications and start paying taxes.

This is the point to call us.  We can look at your trading status and advise you accordingly, assist you with registration with HMRC and prepare your tax returns and tax calculations.