Selling bikes - taxable income?

[Thermised]

Hi!

Recently I've been buying and selling unmaintained/badly maintained bikes or just ones with broken hardware with simple fixes. Most of the time I do this just to waste some time in the evenings, but recently I've had some fairly valuable bikes come to me so I was wondering - is the money I make from this taxable? I remember reading somewhere that you get a £1000 tax-free income from "hobby income" or something along those lines. I was wondering if someone could confirm this for me, or lend some advice for the best way to continue? I have looked around at sites like this tax tool but can't quite get my head around this tax free hobby income thing.

Hoping someone here knows what they're talking about and can help me out
Thanks!

 

[vickster]

@biggs682 might know

You might also want to look into some indemnity insurance in case a buyer has an issue with a bike after sale that leads for example to injury to the buyer or someone else as the result of a failure

 

[srw]

"Seek professional advice on a professional matter" would be goig advice for many threads....

 

[Alembicbassman]

Tax is only usually paid on profits, if you make a loss you've not earned any income.

 

[biggs682]

@biggs682 might know

You might also want to look into some indemnity insurance in case a buyer has an issue with a bike after sale that leads for example to injury to the buyer or someone else as the result of a failure

It's a good question but not one i have asked and surely like @Alembicbassman says no profit no taxes

or is there a threshold you have to cross first before you start paying tax

 

[vickster]

It's a good question but not one i have asked and surely like @Alembicbassman says no profit no taxes

or is there a threshold you have to cross first before you start paying tax

Looks to be when you reach £1000 in profit in a year? Presumably the rate of tax will depend on your tax code

 

[SkipdiverJohn]

It's no different to car enthusiasts who chop and change their motors frequently. Some people will buy something, and then if they get fed up with it, they move it on.
The way round all this Tax nonsense as I see it is to keep any fixer-upper for at least a short period and use it yourself rather than immediately flip it for resale.
Let's be honest, this isn't a big-money game if done on a hobby basis. It's beer money, and for many people, it's literally beer money - so HM Govt end up getting a lot of it back anyway as soon as you spend it down your local!

 

[Alan O]

It's no different to car enthusiasts who chop and change their motors frequently. Some people will buy something, and then if they get fed up with it, they move it on.

People rarely sell their cars for profit, so I don't think that's relevant. It's profit from hobbies that counts as "income" for tax purposes.

 

[booze and cake]

It's a good question but not one i have asked and surely like @Alembicbassman says no profit no taxes

or is there a threshold you have to cross first before you start paying tax

Unless you are Google, Amazon or Apple, or you made donations to the tory party, or have friends or family connected with such shadowy organisations, you're expected to pony up.

I think @biggs682 enterprises could source a shed in Ireland purely for storing bikes, *cough* reducing tax liability purposes

 

[SkipdiverJohn]

OK, look at it like this. You as a private individual, buy a used bike for, say £50. A bike is an asset. You tidy it up and subsequently sell the bike for £100. You've made a £50 capital gain on the disposal of an asset, and you are allowed to make £11k of capital gains per year tax-free.
This assumes that fixing up bikes is not your occupation, and you do not rely on doing it for a living.

 

[raleighnut]

People rarely sell their cars for profit, so I don't think that's relevant. It's profit from hobbies that counts as "income" for tax purposes.

Yes they can, my Father and the next door neighbour (who happened to be a mechanic) bought cars, did them up and sold them at a profit back in the late 70s- early 80s starting with a 'Superminx' and after working through Avengers, Cortinas, Minis and a particularly memorable Austin 1800 (Landcrab) ended up with pretty decent cars in about 3yrs. Never made any money profit though.

 

[Alan O]

OK, look at it like this. You as a private individual, buy a used bike for, say £50. A bike is an asset. You tidy it up and subsequently sell the bike for £100. You've made a £50 capital gain on the disposal of an asset, and you are allowed to make £11k of capital gains per year tax-free.
This assumes that fixing up bikes is not your occupation, and you do not rely on doing it for a living.

The Revenue is fussy about what it allows as capital gains and what it classes as income, and the more regularly you're buying and selling something the more likely it will be classed as income.

 

[Alan O]

Yes they can, my Father and the next door neighbour (who happened to be a mechanic) bought cars, did them up and sold them at a profit back in the late 70s- early 80s starting with a 'Superminx' and after working through Avengers, Cortinas, Minis and a particularly memorable Austin 1800 (Landcrab) ended up with pretty decent cars in about 3yrs. Never made any money profit though.

Not saying they can't, just that most "car enthusiasts who chop and change their motors frequently" don't.

 

[vickster]

Not saying they can't, just that most "car enthusiasts who chop and change their motors frequently" don't.

I can certainly vouch for that. I dread to think how much my petrol head phase cost me. I now do it wth bikes to some extent...luckily the "losses" are in the low hundreds not low thousands!

 

[Cuchilo]

John is correct although i thought it was 12k before you start paying tax .