Author Topic: Buying & selling PC parts - liable to income tax?  (Read 3339 times)

Buying & selling PC parts - liable to income tax?
on: June 07, 2018, 19:08:49 PM
Hello :) I have a (fairly boring) topic I'm curious about - taxes. I buy and sell all sorts of computer parts on top of my full time job for an extra handful of cash, generally spent on more computer parts, and I am intrigued - is HMRC going to be hunting me down for unpaid taxes? I've not a clue how self assessment forms work and can't find much to help me figure them out. I've looked at this tax calculator: https://www.income-tax.co.uk/ and worked out how much tax I currently pay (a lot!!) but haven't been able to work out what the income from selling parts would be. What tax band would it go into? Hoping someone here does similar and can point me to an answer :)

Cheers!

  • Offline Bacon

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Re: Buying & selling PC parts - liable to income tax?
Reply #1 on: June 11, 2018, 18:12:18 PM
I believe you have an allowance each year as the parts are used, i think they are more interested in chasing Ebay traders doing £5000 a month tax free and claiming benefits full time for a non existent ankle sprain.

I know a bloke claiming full rate incapacity benefit and yet manages to walk round bootsales for hours looking for items to sell through his Ebay business which is made £20k on last year.
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  • Offline Dave

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Re: Buying & selling PC parts - liable to income tax?
Reply #2 on: July 28, 2018, 00:50:54 AM
Perhaps a bit late for a reply to this but I'm slightly bored.

I think this can be a bit of a grey area and the answer is really it depends.

Now if you were to set up a Ltd company (perhaps applicable if you were doing serious volume on Amazon/eBay) then it becomes quite clear-cut - you're subject to income tax for any salary you pay, ditto to tax on any dividend payments and if you close the company down then potentially you get entrepreneur relief.


When you're an individual doing this there are two possibilities - capital gains tax or income tax. Now if you've not got other investments etc.. and aren't otherwise using your CGT limit then you could perhaps just make use of that. If it is a few grand a year part time from sporadic buying and selling + you have no other CGT liabilities then you've probably got no tax to pay.

It might well be worth phoning up HMRC but I believe the main thing here is whether or not you're carrying out a trade. If you've gone a bit further than a bit of sporadic buying and selling for a bit of profit and have got an online shop, brand name, business bank account etc.. then you're probably looking at income tax instead (then again you have the possibility of making deductions for business expenses etc.. which could perhaps include your PC etc..).

  • Offline zpyder

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Re: Buying & selling PC parts - liable to income tax?
Reply #3 on: September 28, 2018, 22:43:32 PM
Back in the UK I did a bit of freelance photography on the side. I got caught out by my main employer who refused to pay an invoice for some work I did for them as I wasn't tax registered.

Cue me registering as self employed with HMRC. It was a pain in the bum as it meant every year I had to fill in a self-assessment. The frustrating bit is, that even though my main employment was paid through PAYE and so all tax was deducted automatically and was known to HMRC, I still had tot declare that on the self-assessment as well. Pretty much every year I had to tweak the assessment as I'd put the wrong figure in the wrong box and be told I owed £2000 tax for the year despite not actually making any additional income.

The safest bet would be register as self employed. As Dave said, there are some benefits if you can be bothered to work them out. You can claim back the tax on purchases made for the running of your business (so if you work from home you can actually claim back the tax on a new computer used for your business etc). It's just a case of being super organised and keeping track of all expenses and receipts etc, so at the end of the year you have a relatively painless self assessment. The assessment will only make you pay tax on what you legally are meant to pay. If you don't claim any expenses and don't make any money in a year, all it will cost you is an hour or two filling in the form once a year.

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Re: Buying & selling PC parts - liable to income tax?
Reply #4 on: September 30, 2018, 18:17:15 PM
Don't forget that there is now a new regulation that the first £1000 of additional property and trading income does not have to be declared:

https://www.theguardian.com/technology/2016/mar/16/landlords-and-traders-receive-2000-tax-allowance-to-boost-sharing-economy

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