Selling bikes - taxable income?

Page may contain affiliate links. Please see terms for details.

Globalti

Legendary Member
You'll never make money from bodging old cars or bikes because you'll never be able to charge the value of the time you've spent. Same reason why tradesmen struggle to survive.
 

BoldonLad

Not part of the Elite
Location
South Tyneside
If you are having sleepless nights over this, consult a professional, but, if you are just looking for an opinion.... I would say it is one of those "grey" areas where it depends to what extent you are "trading". HMRC love such "grey" areas. But, being realistic, HMRC have bigger fish to fry that every small time Car-boot Sale seller, or eBay occasional seller, the trick is in determining what counts as "occasional".

Should you be unfortunate enough to be netted, remember, you have a personal tax allowance of £12,800pa before any tax is payable, but, any other income counts towards this offset (eg Pension, certain benefits, etc etc). Only the "profit" would be taxable, ie, you can deduct the buying price and any cost of any materials to repair/refurbish.

Safest bet is probably to become an MP, totally honest all of them ;)
 

srw

It's a bit more complicated than that...
I suggest you read the link to the gov.uk website I gave above. It explains what the allowance is and what it applies to. If your income from this is more than £1k p.a. then, as @srw wisely suggests, you may wish to seek professional advice.
Although if you do have tax to pay (because your income from doing up bikes is more than £1,000 in any given tax year) the HMRC self-assessment website is pretty OK* these days.


*Errmmm.... I'm told. I don't actually do my own self-assessment - I'm lucky enough to be married to an accountant who does it for me.
 

srw

It's a bit more complicated than that...
I'm no expert on tax, but these two posts illustrate the dangers of asking for advice from random strangers on a public forum.

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.
(a) Capital gains rules are irrelevant - what we're talking about is very definitely trading, and any income will be treated as income, not as capital gains.
(b) Whether you "do it for a living" or "your occupation" is irrelevant. If it's a way of making money for you, it's income and subject to the tax rules. In my spare time, I'm a musician and get paid for it. It's a tiny, tiny proportion of my overall income, but it's a job and subject to tax as a job.

You'll never make money from bodging old cars or bikes because you'll never be able to charge the value of the time you've spent. Same reason why tradesmen struggle to survive.
(c) While true, this is also irrelevant - the profit you're left with after offsetting materials used (old bikes, bits and bobs of kit, consumables) against money made from selling is taxable income. Your "living" has to made after tax, not before - unless you're going to incorporate as a company. Which, let's face it, if we're talking about hobby fixing-up is completely irrelevant.
 

Alembicbassman

Confused.com
Since I got back into cycling in 2008 and getting a bid fed up with the cost of taking things to my local bike shop I decided to start teaching myself bike maintenance in 2010.

I scoured ebay and gumtree for cheap bikes that needed some tlc, bought some tools and watched a lot of youtube videos, read a lot of Sheldon Brown's pages and Park Tool tutorials.

I've bought and sold nearly 60 bikes to date, averaging 7.5 a year.

I've never made a lot of money on them, some have taken up to 10 hours work or more to complete.

The best ones have been: 1980s Raleigh Randonneur - bought for £150 spent £70 on parts, about 5 hours of labour, sold for £400. Claud Butler Dalesman, bought for £40, £50 for parts and 8 hours labour - sold for £250.

Most others I made £30-40 on, some made a small loss.

Adding in labour and travelling expenses the monetary gains are very small.

I bought 3 new bikes in the same period, made a big loss on all of them when I sold them.

If I add up the profits I made from the used bikes to the losses I made on the new bikes I'm about even.

I've learned a lot, which is the best thing, and don't have to pay shops to do my maintenance now.

I'm always on the lookout for bargains, but there's not much about at the moment.
 

GaGa

Well-Known Member
Location
Merseyside
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 :smile:
Thanks!
Don't bother, I'm sure the Country will survive without you paying what must be a negligible amount of tax . I wouldn't bother asking the H.M.R.C. for advice either, you might get some anal retentive jobsworth who makes a drama of things. Sleeping dogs lie and all that.
 

Slick

Guru
Don't bother, I'm sure the Country will survive without you paying what must be a negligible amount of tax . I wouldn't bother asking the H.M.R.C. for advice either, you might get some anal retentive jobsworth who makes a drama of things. Sleeping dogs lie and all that.
Whilst that opinion will most probably be shot down by the holier than thou, I concur.
 

Slick

Guru
[QUOTE 5230023, member: 9609"]when you hear of how much the likes of google and amazon pay in taxation to the UK gov it becomes very difficult to criticise any average person for getting a few quid in their back pocket.[/QUOTE]
Exactly. Especially if they are already a working tax payer.
 

Drago

Legendary Member
Change your phone number and the style of your ads regularly, and carry on as you are.
 
Top Bottom