Self employment and selling.

[frugalman]

Just a quick 2 questions on when it comes to selling in the UK.

How much can you sell before you are taxed?

If you are already self employed, does this count as earnings or savings?

 

I got a few goals. 

Have enjoyed my time on the forum and hope I have not been mistaken for a fiat shill.

I wish only for the purchase of gold and silver to be perceived as being patriotic (Which indeed it is!).

 

Thank you and best wishes F. 

[BackyardBullion]

The following is not formal financial or tax advice, it is my opinion and interpretation of the rules around this topic. I would recommend speaking to a qualified financial expert for definitive advice. 

Have a good read of the Badges of Trade from HMRC and if you think you are fitting into these then selling would probably be a trade therefore you would be taxed. 

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

From memory everyone has a £1000 TURNOVER (not profit remember) allowance for hobby style business but that will get eaten up super fast with PM's.

If you are already registered as self employed I would highly recommend two things. First, get a business bank account in your trading name and all actual work related payments go in there. Then you have your personal account which can be used when you are selling assets that do not fit in the badges of trade. Keep good records of what you sell and when and should you ever get audited by HMRC (unlikely but not impossible) then you are prepared for it. 

 

[sixgun]

What line of business are you self employed in?

[greektony]

if they are Britannias are they not CGT exempt regardless of your job? Or actually any coin minted by the Royal Mint (Silver, Gold or Platinum)?

 

EDIT: according to the Royal Mint, the above is true

https://www.royalmint.com/gold-price/capital-gains-tax-on-investments/

Edited November 18, 2021 by greektony
added link

[BackyardBullion]

Just now, greektony said:

if they are Britannias are they not CGT exempt regardless of your job? Or actually any coin minted by the Royal Mint (Silver, Gold or Platinum)?

CGT Status does not apply to goods that you retail as part of a business. This is seen as generating income rather than holding assets and releasing them at a profit at a later date. 

Comes back down to the badges of trade. 

If a sole trader who makes Wooden toys for a living also bought some Britannias under their own name and held them for 10 years and then sold them this would be a clear cut case of them being an asset and not related to the main part of his income generation.

If the same sole trader bought a monster box of 500 Silver Coins Every Month, at a discount, on finance, then sold them one by one in a fancy display capsule on eBay then that would most certainly be deemed to be trading as part of the badges of trade. 

A one off of the above example might be OK and you can argue it was a private investment that you changed your mind about so sold quickly. 

Do it too often and it is blatant you are trading.

If a company or sole trader bought them as an asset for the business, that might fly for CGT but you would have to check and probably declare it first. 

[sixgun]

The reason why i ask about the line of business is it may influence how your sales would be viewed. You might be a self employed kitchen fitter, or a web designer or whatever. So that you are self employed is neither her nor there. If you were a Trotter's trader - buying and selling as a business, then buying and selling is much more likely to be viewed as an extension of your business.

If you are carrying on as a business, then you will be viewed as a business. 
To some extent it depends how much buying and selling you intend to do. 
As pointed out you can sell stuff online effectively as a business as long as your turnover is £1000 or less in the tax year. You are a very small time trader - so small time that HMRC and the Government don't think it is worth while the paperwork chasing you for a few quid, so they have made this rule.

Selling more than £1000 online however doesn't necessarily make you a business- you might sell £20k online and still not be a business. It doesn't take much to exceed the £1000 - sell a 1 oz gold coin and you have blown through that.
What matters is how you present yourself.
If you present yourself as a private individual selling bits and pieces online to rearrange your collection of coins - you don't give yourself some sort of name like Frugal Precious Metals - you don't run with a separate bank account - you aren't clearly flipping coins on a regular basis etc etc - then you are ok.

There is the CGT allowance as well as that UK coins are CGT free. You could sell coins in your wife's name as well for example and so double the CGT. i posted about selling personal possessions - chattels.
https://www.gov.uk/government/publications/chattels-and-capital-gains-tax-hs293-self-assessment-helpsheet/chattels-and-capital-gains-tax-2020-hs293

Disposals of single chattels

How to calculate gains and losses

You do not need to calculate any gain on the disposal of any single chattel if the disposal proceeds did not exceed £6,000. If the proceeds exceeded £6,000 but were not more than £15,000, the amount of the gain to return depends on the amount of the:

• disposal proceeds
• actual gain

So in effect this is in addition to your CGT allowance b/c you don't have to calculate the gain to set against the CGT allowance.

If you are in business you will likely have an accountant / bookkeeper - i would put this past them but if you don't go mad, if you sell moderately to rearrange your collection as it develops i don't think there should be an issue. 

Edited November 18, 2021 by sixgun

[greektony]

I assumed (maybe incorrectly) OP wasn't in the business of selling PMs but just self employed in an unrelated industry. Guess I also assumed they held their PMs personally and did not buy them through their own company. 

Think I may have made too many assumptions lol

Edited November 18, 2021 by greektony

[frugalman]

3 hours ago, sixgun said:

What line of business are you self employed in?

 

6 hours ago, BackyardBullion said:

 

 

If you are already registered as self employed I would highly recommend two things. First, get a business bank account in your trading name and all actual work related payments go in there. Then you have your personal account which can be used when you are selling assets that do not fit in the badges of trade. Keep good records of what you sell and when and should you ever get audited by HMRC (unlikely but not impossible) then you are prepared for it. 

6 hours ago, BackyardBullion said:

The following is not formal financial or tax advice, it is my opinion and interpretation of the rules around this topic. I would recommend speaking to a qualified financial expert for definitive advice. 

Have a good read of the Badges of Trade from HMRC and if you think you are fitting into these then selling would probably be a trade therefore you would be taxed. 

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

From memory everyone has a £1000 TURNOVER (not profit remember) allowance for hobby style business but that will get eaten up super fast with PM's.

If you are already registered as self employed I would highly recommend two things. First, get a business bank account in your trading name and all actual work related payments go in there. Then you have your personal account which can be used when you are selling assets that do not fit in the badges of trade. Keep good records of what you sell and when and should you ever get audited by HMRC (unlikely but not impossible) then you are prepared for it. 

 

Hi, Thanks for your reply. Mainly fencing, hedges and landscape gardening 5 yrs SE now (always paid in cash, putting some in the bank for vitals). Just got in and started reading and called for dinner so will reply in full in a bit. Thanks again. 

 

[frugalman]

7 hours ago, BackyardBullion said:

The following is not formal financial or tax advice, it is my opinion and interpretation of the rules around this topic. I would recommend speaking to a qualified financial expert for definitive advice. 

Have a good read of the Badges of Trade from HMRC and if you think you are fitting into these then selling would probably be a trade therefore you would be taxed. 

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim20205

From memory everyone has a £1000 TURNOVER (not profit remember) allowance for hobby style business but that will get eaten up super fast with PM's.

If you are already registered as self employed I would highly recommend two things. First, get a business bank account in your trading name and all actual work related payments go in there. Then you have your personal account which can be used when you are selling assets that do not fit in the badges of trade. Keep good records of what you sell and when and should you ever get audited by HMRC (unlikely but not impossible) then you are prepared for it. 

 

Yes backyard bullion seems I will have to get a business account and use my normal debit account separate. I'm not on uni credit and I don't like to overwork but I have a regular bunch of clients that keep me ticking over and a steady relationship with the tax man (he even gave me £400 to last me over the entire furlough  ). 

I'm just worried that he will see my own personal collection of metal objects that I bought with my own spare cash (that I have never really considered selling up to this point) as assets. 

[BackyardBullion]

7 minutes ago, frugalman said:

Yes backyard bullion seems I will have to get a business account and use my normal debit account separate. I'm not on uni credit and I don't like to overwork but I have a regular bunch of clients that keep me ticking over and a steady relationship with the tax man (he even gave me £400 to last me over the entire furlough  ). 

I'm just worried that he will see my own personal collection of metal objects that I bought with my own spare cash (that I have never really considered selling up to this point) as assets. 

If you bought silver with you own money, not a ltd company bank account then as a sole trader it won't make a difference unless you actively act as a trader for those metals.

Pretty much unless you are buying and selling on a very rapid turnaround you will be fine. 

[frugalman]

Just now, BackyardBullion said:

If you bought silver with you own money, not a ltd company bank account then as a sole trader it won't make a difference unless you actively act as a trader for those metals.

Pretty much unless you are buying and selling on a very rapid turnaround you will be fine. 

What would be considered rapid? It all adds up when you been squirreling the metal away. One coin that I have could go over the 2 thousand pound mark, thats well over the £1,000.

 

[BackyardBullion]

Just now, frugalman said:

What would be considered rapid? It all adds up when you been squirreling the metal away. One coin that I have could go over the 2 thousand pound mark, thats well over the £1,000.

 

Are you buying the coins to sell within a few months specifically for profit? Are you using the proceeds of sales to buy more and then sell more too? That could be interpreted as trading by HMRC.

If you are buying coins and holding for a year then this is easily a personal investment not trading. 

Even if you sell within a short time, that is fine, it's just if you do it over and over and over again.

Have a read of the badges of trade.

[frugalman]

1 minute ago, BackyardBullion said:

Are you buying the coins to sell within a few months specifically for profit? Are you using the proceeds of sales to buy more and then sell more too? That could be interpreted as trading by HMRC.

If you are buying coins and holding for a year then this is easily a personal investment not trading. 

Even if you sell within a short time, that is fine, it's just if you do it over and over and over again.

Have a read of the badges of trade.

Well thanks BYB that's really reassuring I held most of my bits and bobs for lots longer than that. I guess I'm a born worrier. 

When I sell, I will sell in one go. But it will still take a long long time. It would probably take over a year. 

Thank you for putting me straight and giving me the info.

Kind regards, Frugal.

[frugalman]

2 hours ago, sixgun said:

f you present yourself as a private individual selling bits and pieces online to rearrange your collection of coins - you don't give yourself some sort of name like Frugal Precious Metals - you don't run with a separate bank account - you aren't clearly flipping coins on a regular basis etc etc - then you are ok.

sixgun, I always put off thinking about selling, so I became slightly paranoid and confused over the issue.

Hey but "Frugal Precious Metals sounds fantastic"  No I would lose out as a quick turnover dealer lol

I was with you on the squeeze so I shall have to keep those rounds for a while I guess  

Thanks for your advise,

Kind regards Frugal.

[HerefordBullyun]

10 minutes ago, frugalman said:

sixgun, I always put off thinking about selling, so I became slightly paranoid and confused over the issue.

Hey but "Frugal Precious Metals sounds fantastic"  No I would lose out as a quick turnover dealer lol

I was with you on the squeeze so I shall have to keep those rounds for a while I guess  

Thanks for your advise,

Kind regards Frugal.

I look forward to you flogging me silver at very frugal prices. £10 an oz is frugal enough for me! Feel free to flog me your entire stack at stated price £10 per oz 🐮👍😁

best of luck btw

Edited November 18, 2021 by HerefordBullyun

[frugalman]

22 minutes ago, HerefordBullyun said:

I look forward to you flogging me silver at very frugal prices. £10 an oz is frugal enough for me! Feel free to flog me your entire stack at stated price £10 per oz 🐮👍😁

best of luck btw

Bully its my own frugality that I'm interested in pal.

I keep seeing those big ebay prices lol

I miss the old bully photo  I was watching the forum long before I joined and I knew when the humor was coming  

Cheers bud U2

 

Edited November 18, 2021 by frugalman

[sixgun]

2 minutes ago, frugalman said:

I miss the old bully photo  

i suspect the poppies are in memory of fallen comrades.
i think Bully will be back once he has shown his respect.

[HerefordBullyun]

5 minutes ago, frugalman said:

Bully its my own frugality that I'm interested in pal.

I keep seeing those big ebay prices lol

I miss the old bully photo  I was watching the forum long before I joined and I knew when the humor was coming  

 

The photo will be getting changed back tommorrow I keep it after a few days after rememberance for each one of the lads I knew and lost. So bully willl be back he's just emptying his arris to make my rhubarb grow a bit longer for a few days! 

2 minutes ago, sixgun said:

i suspect the poppies are in memory of fallen comrades.
i think Bully will be back once he has shown his respect.

Mr @sixgun knows the score! 👍

Edited November 18, 2021 by HerefordBullyun

[frugalman]

1 minute ago, HerefordBullyun said:

The photo will be getting changed back tommorrow I keep it after a few days after rememberance for each one of the lads I knew and lost. So bully willl be back he's just emptying his arris to make my rhubarb grow a bit longer for few days! 

Mr @sixgun knows the score! 👍

Sorry bully my vision is not what it was. Top man, respect.

[HerefordBullyun]

4 minutes ago, frugalman said:

Sorry bully my vision is not what it was. Top man, respect.

Nor mine - my mother told me to stop when I was young, but desisted her advice 🎺 - be well my friend!

[frugalman]

Just now, HerefordBullyun said:

Nor mine - my mother told me to stop when I was young, but desisted her advice 🎺 - be well my friend!

 

Just now, HerefordBullyun said:

Nor mine - my mother told me to stop when I was young, but desisted her advice 🎺 - be well my friend!

Darn it I run out of my like quota you naughty bully lol