Search the Community

Received a letter this morning from Warrantywise regarding the increase in IPT. Another reason why when I do buy a warranty I buy it from them. They are an independent service and maintenance company so don’t operate on an insured basis so therefore don’t charge you IPT. Worth looking in to as they reckon the IPT is going to rise again from what is now already 12%. Their website address is www.wisedealer.co.uk

Hi, Ok so I have a full time job but want more income and I'm very interested in selling used cars from home. I have £10000 capital. Ive sorted trade insurance quotes, ready for a trade account at Manheim, been to a couple of auctions. (profit margins look quite good) Looked into trade plates etc. So I think i'm starting to understand the business. (tell me if i'm wrong : ) BUT i'm a bit confused with VAT, tax and NI. So in need of some advice, I'm only looking to sell 1 maybe 2 cars a month so not needing to be VAT registered. So the bottom line question is......Will I have to pay 20% VAT, 20% TAX and 9% NI on cars I sell? So basically half of my profits. I would only buy VAT margin cars from the auctions. So basicly is there any money to be made if I have to pay 50% of my profit to the government? Or am I wrong? For example Car bought for - £10000 Sold for £12000 Profit £2000 - Vat on the £2000 = £400 -Tax on the £2000 = £400 and the 9% NI on taxable profit... So profit would then be £1092? Is this correct? I'm not registered as a sole trader yet. Any advice appreciated, Thanks, Nick.