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.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.
(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.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.
(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.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.
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.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!
Whilst that opinion will most probably be shot down by the holier than thou, I concur.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.
Do HMRC have hordes of people at every car boot sale? Do they have armies of employees scanning eBay?
They don't need 'armies of employees' to do it, an army of 'spybots' just feed info on sellers to the investigatorsThe latter, most certainly.
No more like the 42 robots watching this forum currently.Spybots? Like terminators?