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HMRC Advice


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34 minutes ago, Cornishfarmer said:

no sure about this subject but if you buy a car for £15000 and sell for£7.500 you cant claim the loss against tax and you dont get charged tax on the £7500.

why should it be any different to this.     

Normal cars are excluded from CGT

Classic Cars (IE investments) are not, so if you made a mint on one you could be liable for CGT

There is an allowance that can be applied when you make a loss on an asset (within 4 years) when you then make a gain on another

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36 minutes ago, Cornishfarmer said:

no sure about this subject but if you buy a car for £15000 and sell for£7.500 you cant claim the loss against tax and you dont get charged tax on the £7500.

why should it be any different to this.     

That would depend, if it is a capital asset, if the car is a business asset then the loss is amortisation. The amortisation can be written off against profit and loss and reduce tax.

That's if you're a corporation though, as an individual not running a business a car is not classed as capital or investment.

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1 hour ago, goldbones said:

You could hedge against a drop to lock down the whole thing by placing put options on a silver ETF, that way if silver goes down your puts will profit.

It is still an awful lot of time and trouble to go to.

After crunching the numbers it probably wouldn't be difficult to convince the HMRC that making money off selling Silver on eBay  is a non-starter.

The only way you can make money is to buy and hold,then hope the price sky rockets.

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9 minutes ago, FriedrichVonHayek said:

It is still an awful lot of time and trouble to go to.

After crunching the numbers it probably wouldn't be difficult to convince the HMRC that making money off selling Silver is a non-starter.

The only way you can make money is to buy and hold,then hope the price sky rockets.

Sure, for you maybe, but you said 59p which is a decent profit margin of 5%, when you sell at a 5% margin it means youre doing 100% better than most retailers.

So all you say is that it's low volume personal sales.

If the volume/turnover was high enough 5% is really good though.

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39 minutes ago, goldbones said:

Sure, for you maybe, but you said 59p which is a decent profit margin of 5%, when you sell at a 5% margin it means youre doing 100% better than most retailers.

So all you say is that it's low volume personal sales.

If the volume/turnover was high enough 5% is really good though.

That 59p excludes the cost of padded envelopes and cost of petrol to and from the Post Office plus time involved packing.

You would have to do it on a massive scale and hedge your liabilities against any price drop.

I would make more money working overtime than selling Silver/Gold.

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Well you'd have the royal mail come to collect and send, you wouldn't physically be going up and down the post office. A jiffy bag might cost 50p in the shops but if you buy a bunch wholesale they'll be less than half a penny each.

You get an account at the royal mail as a business so you don't pay consumer rates, you pay bulk rates and you use their software for tracking and printing labels.

Ebay accounts are cheaper if you're a power seller and you dont pay the same 10% and paypal is a lower rate too.

But yeah i suppose the margin is too small for ordinary people, someone who has several businesses already and can put a lot of capital to work can probably pull it off though.

 

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4 minutes ago, FriedrichVonHayek said:

I now collect watches instead of precious metals and will buy metals again when Gold drops under $1000 oz.

But I will just buy ETFs rather than messing about with eBay.

ETF's are a derivative product so you don't own the metal, and the people running the fund don't either so those things can blow up...they might not but i don't trust them, their prices can be off, miss big moves in trading overnight (the etf can be inactive until the actual trading hours in london so it doesn't mirror exactly) the spread is often large and there is hidden charges that keep it below where it should be trading at. Good short term for trading but that's about it.

Better to get an allocated storage account where you are exposed to the up/down moves exactly , can sell for cash or have what you own delivered. Baird&co does that

http://www.goldline.co.uk/metal-accounts.page

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This is getting out of hand, 

You don't pay income tax on the profit of the sale!  Its the profit the business makes!

If you are selling a collection and not a 'investment collection' for instance a model car collection you had as a young boy this is NOT trading, If you by a roll of Perth silver 2 years ago then sell at 30% mark up on ebay after fees  on a buy it now you may be classed as a trader.  The problem comes with hoarders of coins who collect them then in 10-15 years want to sell them they are not traders but the collection is to big. 

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Unfortunately HMRC reply on people to contact them if they are traders but since so many people are dishonest, they just contact people who they think may be traders.  If they did investigate, it would be easy to see who are selling personally owned items and who are deliberately buying items to sell.

HMRC noticed the problem many years ago as eBay grew.  Some people realised they could go out and buy stuff from the likes of car boots and charity shops and sell them for a profit.  These people would be classed as trading.  As the internet grew, people bought stuff from overseas and sold them through eBay.  Again these people are classed as traders.  The problem is that only a minority of these people actually registered as traders since most had day jobs and they were only doing it part time.  Now it's pretty much out of hand.

Anyone who is selling their own personal collections have nothing to worry about.  All HMRC do is phish and probably don't even bother looking at their records.  They contacted me a few years ago telling me that they suspect that I was trading and also selling on line.  That was completely true and they should have known that since it's on the self assessment which I file and I was VAT registered as well.  Another time they contacted me to check to see if I was keeping good records, completing this that and the other correctly and whether I had an agent for book keeping.  Seriously....AGENT...it's on file that I have an accountant and a copy of all correspondence is sent to them as well as myself.  They were however polite and accommodating enough to ask whether it was a good time to talk and it just so happened that it wasn't so I organised for them to ring back during a specific time window.

It's not just about bullion.  HMRC will contact any one in any field who they suspect may be trading.

 

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1 hour ago, Pipers said:

You don't pay income tax on the profit of the sale!  Its the profit the business makes!

You do if you are a sole trader. Your 'business' profit forms part of your income.

 

DOI: I was a sole trader for years before I incorporated.

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5 hours ago, goldbones said:

ETF's are a derivative product so you don't own the metal, and the people running the fund don't either so those things can blow up...they might not but i don't trust them, their prices can be off, miss big moves in trading overnight (the etf can be inactive until the actual trading hours in london so it doesn't mirror exactly) the spread is often large and there is hidden charges that keep it below where it should be trading at. Good short term for trading but that's about it.

Better to get an allocated storage account where you are exposed to the up/down moves exactly , can sell for cash or have what you own delivered. Baird&co does that

http://www.goldline.co.uk/metal-accounts.page

I might possibly look into an allocated Gold account in the future,this would probably the best option for me.

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6 minutes ago, FriedrichVonHayek said:

Also I suppose that all the Silver I have given away to my nieces,nephews and godchildren should count against any profits I have made.

I'm not sure you'd be allowed to allocate a zero value to gifts such as these. You'd probably have to assign a true market value to them in your books for accounting purposes.

Profile picture with thanks to Carl Vernon

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16 minutes ago, sovereignsteve said:

I'm not sure you'd be allowed to allocate a zero value to gifts such as these. You'd probably have to assign a true market value to them in your books for accounting purposes.

If HMRC are trying to say I am trading online,what kind of business gives away products for free!

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you wouldn't be able to declare gifts given away as a tax loss. Samples within a business usually would be declared as zero value

For personal tax though, a gift given (asset, if high value) could actually give the receiver/sender a tax cost (depending on how its done)

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20 hours ago, JB3 said:

Gifts can be tax-deductible. They can be a reasonable operating cost.

 

It all has to be reasonable. Check with your accountant.

I haven't got an accountant I am just a bloke who has sold some Gold and Silver on eBay.

The HMRC want to know if I am operating a business which I am not.

I realise there are all kinds of wheezes to mitigate taxes,but in a nutshell I have just sold my collection as well as giving some away as gifts to friends and family.

Hopefully people on this forum will be careful when using the internet when the time comes to sell their collection.

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42 minutes ago, Danny-boy said:

I have sold about £8k on eBay in the last 6 months, all silver, and it sounds like I'm lucky not to be contacted.

Hopefully you won't.

I wouldn't have known that they were interested as for some reason the HMRC sent my letter to an address that I have not lived at for 19 years,my brother now lives there so forwarded the letter to me.

I found this a little odd and asked the woman at the HMRC how this happened but she did not know.

I have moved house twice since I have lived there and have never had any internet accounts connected to that address.

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On 23/12/2015 at 19:57, JB3 said:

You do if you are a sole trader. Your 'business' profit forms part of your income.

 

DOI: I was a sole trader for years before I incorporated.

This makes no sense, if you make 50p per item then you pay 40% of that? I say this as most will have full time other employment.  Even  very small businesses will have running costs so that 50p could go right down.  I have to say I have never been a sole trader. 

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