Hi there Nic, my husband worked for the HMRC for many years, Now we both ebay full time, He says that The information she gave you is not accurate, and you can't force anyone to give you a receipt at a car boot sale etc. What you need to do is keep an accurate record of cash expenses, as you are doing this would be adequate, ask any accountant and they would tell you the same thing. The important thing is to make sure you update your records on the day the items are purchased, or as near as possible.x
I agree. A Flying Squad copper was asked to get a receipt from a drug dealer, whom he was trying to befriend on an undercover operation. All HMRC require is you be consistent and truthful. Where you can get written proof - do so.
i guess im asking the wrong place but does anybody know a way to get back into an instagram account?? I stupidly forgot my account password. I would love any tricks you can give me!
We have kept a excel spreadsheet from day one of every penny that comes in and out of our business and so I hope this plus the bootsale logs and other receipts we have will all be OK if ever we get audited. Great vid Nic really enjoyed it and thanks for opening this debate up again.
I wouldn't say it's lacking a grasp of real world trading conditions. Rather, it's a very rare scenario where a business purchase can't have receipts/proof of purchase. It's an isolated issue to a very small group of persons.
I disagree a lot of small business owners buy used items either for resale or for use in there business used machinery, tools etc, many small businesses cant afford to buy everything brand new. With the growth of sites like gumtree, shpock and facebook selling groups it will get more common people buying used items from private individuals.
@RetroCable - The HMRC doesn't state you have to have a receipt. HMRC states that you have to have proof of purchase and the price. Whilst a receipt is a proof of purchase, it's not the ONLY way to prove a purchase. Proof of purchase can be the outgoing payment on your bank balance. So for Gumtree and Facebook, you can take a screenshot of the asking price on the website. Then your cashflow statements back up the purchase amount. IE; you pulled out £10 at a cash machine for the £7.99 purchase.
@@janedoorgachurn7765 Exactly what I do, with this covid situation it helped me not deal with cash and 95% of people took a bank transfer when i collected. I have their name (from my bank statement and facebook if needed but bankstatement helps a lot more) I have the date and the exact amount transferred. So my spreadsheets have something like this... Playstation 4 console / date purchased/ 'jane smith'/ purchase amount / payment source 'VISA XXXX' .... If i buy a bundle off the same person I split into lines for that person and work out a fair cost value for each item. The other 5% with cash i withdraw for example £50 and under payment source i put 'VISA XXXX (CASH WITHDRAWAL) so it matches up the same date on my bank statement. Been doing this for a long time and god i hope this is ok lol!
My accountant said that on every boot sale we should get receipts that you attend ( paying entry fee ) and rest just record as nick shown. At least you can proof that on that days you have been there
Thanks for sharing your experience with HMRC - I am slightly surprised that they have not recognised that a significant number of people will work the way we do and not be able to get receipts - all we can hope is that one day they will make some progress. I am doing the same and simply recording all expenditure and hoping they wont give me grief....
Good effort Nick. What I wish you had said to her was - OK so what your saying is if a spend a £1000 pounds at a car boot sale and have no receipts of purchase I cannot claim that as cost of sales right? So that surely means if I sell items at a car boot sale and make £1000 but have no proof of sales then I don't have to pay any tax on that £1000 right?
@Steve Hitchman Your examples aren't comparable. If your selling £1,000 worth of goods, you're required to keep adequate records. HMRC rules (whilst a bit annoying) are put in place to stop tax evasion. Your example is flat-out tax evasion as you would be doing it on purpose. (As you're supposed to have the records and there is no reason to not have records.) Your example is 'Rule to stop tax evasion' VS 'Way to avoid tax on purpose'
Absolutely. It should work both ways if they aren't interested in any expenses on items there's no receipts for, then surely, any money made from sales of the same or similar items that have no receipts attached shouldn't interest them either! Seems they're only interested when it makes them money, but when you're out of pocket it matters not a jot to them.
Ha ha brilliant. Gave me a chuckle.. Your expressions said it all, I'm never that calm on hoooooooooooooooooooold😬! They said what you expected but thanks for trying for everyone.
hi there new reseller here . This whole thing with purchasing receipts has got me a little worried as I have no recipts like you explained as when you buy from car boot. It’s been 6 years since this video as I can see . And you are still continuing with your reselling How did you overcome this issue of keeping records of the value of items that you purchased. I’ml
I'm currently "working" with HMRC trying to resolve an issue that has been in the making for no less than three years , they claim I haven't paid two VAT returns and despite showing them the money leaving my account and the payment arriving in there account they refuse to cancel the debt and admit they have mis allocated the funds...
Would you be able to get an invoice pad/book, and once the sale has been made stand back a bit and list what you bought and then get the person to sign it and give them the top copy, it may be a bit of a pain in the neck, but at least you would be protected.
You'd be better talking to a good Accountant as they know all the rules and regulations of HMRC. Having an Accountant is worth their weight in gold whatever the size of the business.
ive spoken to accountants about this and they said just keep a ledger as you do. I've also heard you're allowed x amount of self written receipts? a ledger is sensible. that's what I do. date time item and cost of all items. its impossible to get receipts from everyone like you said.
I worked for a large computer company in the 70's, we could pick up things like fuses and solder from the stores by the handful. It cost the company £5 for every claim by an engineer for parts therefor it was allowed on small cost items as above. The Government changed the rules so it all stopped and we had to present a request for the likes of 5 fuses (cost 10p) to the stores etc. Sheer madness.
You could create an invoice from the nice bloke that you met in the pub that you bought all the stock off as a job lot that you have never seen again?? I think his name was Smith
Is there anything along the lines of 'personal asset' and then turning them into a 'business possession' ... say for instance u had a cupboard and then it suddenly used in your business then you decided to sell it. Or an old Toolbox lying about and then its got some value to your business and then sell it with a sales receipt. That's a heck of a lot of Assets
Great video nic, I've bought a GoPro and record my transactions that way for car boots and written books as well. Cover all areas that way. Keep it then good work.
Have a friend or family member purchase all your boot sale items for you (or own the items at purchase point) , then purchase them all with a dated receipt. They have not made a profit therefore, no tax liability. Now you have your receipt.
Ehh, so when you work out your profit margin (after fees/p&p/ minus the buying in price) there's no point!!! Do HMRC still accept your profit margins from items you've bought from car boots ect?
Hi Nic, really useful vid, thx. Related to this, I wonder how you account for items bought in one tax year, that are unsold and carried over to the new tax year. Do you carry out a stocktake and show a value on your accounts? Also, when I buy mixed job lots, for accounting, I am recording sales/costs/profits against the lot, rather than sorting the items and dividing by total job lot cost, to get the individual items cost/sales/profit, wonder if this is correct or best way to account for job lots?
Bit late 2 years lol but I will answer, I had these issues and the issues this guy had. Basically what i do is for example i buy say 10 games off 'Jane Smith' from a boot sale for £100. I then record in a book what i bought, there name (luckily managed to get there name every time), the date and split 10 lines into games and split it so £10 per game. I then go home and i use spreadsheets to again enter in my stock, fill in all the information (split 10 lines for the games) and put £10 each, total £100. Then when i stick the games up for sale and say half of them sell for £100 (£20 each) I mark each line green to show its sold. I also have a tab for 'cost of goods sold' this is my expense so i make that £50 expense and for the sake of this example lets say theres no more expenses, my spreadsheets will then show £50 profit. Whole point of this is that i only claim expenses when an item sells (cost of goods sold). This helps not having to declare my next tax year of stocktake, I believe you only have to do this if you are claiming ALL of your stock as an expense (sold and unsold). Otherwise people would go spend 10k of their profits before the tax year on stock claiming its an expense but then realising they have to do a stocktake on there closing stock for the year which can be complicated. I think the way i do it is easier, but both methods work depends on your scale. For example I have paid out £4800 this month on stock, I've claimed I think around £2000 of that as my expense of 'cost of goods sold'. I hope this makes sense! sorry its long.
Maybe you could record every transaction on video.. you can get quick to operate cameras that hang like a pendant around your neck nowadays. If there is any dispute just pull out the video recording of you handing over the fiver for the monkey coin box and there you go. Perhaps not as daft as it first sounds. Video evidence can be used as evidence in court for many different situations. I think after the jury has watched 1842 videos of you handing cash to strangers on a damp field you would have a pretty strong case.. even if you don't know the combination.
Proving items bought from charity shops with receipts is the same, I go in loads of charity shops and buy perhaps 10 items in one, 6 in another, 8 in another perhaps spending something like £70 - 100 and coming home with many dozens of items of all categories but the receipts say things like Dept 1, Dept 6, Dept 9...no indication of what it is you have bought. Some charity shops don't put the items in separately, they add them up then put one sum in the till! and of course, then you have charity shops that cant even be bothered to set the till up so the date on the receipt is 00 - 00 - 2000.If the inland revenue wants to see any resellers receipts then yes they can but making sense of what it was in Dept 4, 7 months ago is another matter!
Darren Bushnall lmao yeah I've noticed this, sometimes they'll put something like a dvd through as 'ladies clothes' lol no idea how that works, I just write on the top of the receipts which items I bought and hope for the best lol
The on hold clip was funny stuff! I didn't know what a "ledger" book was before this video so will have to get one & can anyone tell me what you write in this? Is it just the Item description and price paid and where / date purchased? Anything else? Do you also record your packaging supplies and fees etc in this book? I think I need to learn more about accounting.
best way to do it is when you get back from a booty see how much you spent and how many items you brought then divide items on how much you spent say you brought 20 items for £50 that = £2.50 each then your have a better average when you sell your items of what to take of the cost price,a bit like nick with hes postage,,,
without receipts they are ineffect saying 100% of your selling price is taxed. i would take a triplicate book with you and get the seller to sign for cash received, where and when paid etc take photo of item.
Interesting vid thanks. What is the situation in the USA? Are they any further forward with their TAX than us??? I know HRMC are worried that we the low earners are screwing them for TAX. When really they should be chasing the bigger fish at the top of the pile who are shafting them for millions.
Kind of but if you had your accounts seized - as can happen in extreme case - and you have books detailing all transactions (whether cash or not) they really wouldn't be any grounds for suspicion to investigate further as long as the figures tally with the tax return you filled out.
A log book is important if you don't have receipts as the HMRC can use it to see if you're smudging numbers. It would be very hard to smudge numbers on a log book, without catching yourself out somewhere else. IE; You 'say' you spent £10,000 on stock last year and your sales were £12,000. That's £2,000 profit. (Ignore fees etc for this example.) So can you explain where the extra £6,000 in your bank has come from?
@@lukazupie7220 Sadly, eBay and PayPal good old times are over. They have changed the rules of the game so from now on, everything goes directly to your bank account.
I know I'm probably asking a stupid question 😊😊 But are they saying that we shouldn't be selling stuff you get from Carboots because we can't prove it?
Your bank statements can be evidence to show the cash you took out to buy your goods then i would suggest listing them & totalling up for each purchase eg £5 at one car boot stall £20 at another etc; it's up to you to keep good written record for yourself in case HMRC wants to do an audit for any purpose www.gov.uk/self-employed-records/what-records-to-keep
Yes - I had it pierced a very long time ago when working in America, it is closed up now but sometimes I pick at the scar and make it red and it shows up more :)
In the absence of any other evidence Nic, what you have to say, via contemporaneous notes, is surely evidence and the best evidence they'll get The assistant to whom you spoke had asked her colleagues but no policy, statute, SI, regulation or case law was quoted as authority for the answer. I've often found that officialdom backs down when you ask for their authority for an assertion - or else they can quote the authority and then I can go look it up. Thanks for enduring the awful "music" in pursuit of this information.
Thanks Anne - yes I know exactly what you mean - and if push came to shove I would argue my case - at least in my case I have 2 and a half years worth of haul videos to show the level of stock I source in this fashion :)
do you know why? they are using a cisco phone system. the music is to calm you down and keep you on the phone. take for instance australia welfare the hold music makes you angry frustrated and want to hang up so they don't have to deal with you as they are not income generated
lmao so basically if we get audited none of our car boot sale stock will count as an expense and therefore our profits will be much higher and we will all owe a tonne more tax?! I suppose the only option if you really want to do it right would be to only shop at charity shops where you can get a receipt. They really need to look into this! Thanks for making this video! :)
Technically, by the 'rules', yes. However the HMRC have a lot of data that can prove if you're lying about the cost of things. For example, the data may show that other people doing car-boots for profit in your area are making a 64% profit margin, whilst according to your records, you're getting a 5% profit margin. They can tell by things like that if you're lying.
Not only that it is impractical to write up a receipt at the car boot but also this are private people not businesses. Surely I would NOT give my address and contact details to a random person at the car boot tbh. This is crazy and unrealistic requirement
What we need is some quality legal advice. if you are in dispute with HMRC about tax owed..for example after an audit.. and they argue you owe more money because all cash receipts don't count, And you argue that its unreasonable to expect cash receipts because it's impossible.. would this be a valid defense legally? In whose favour would this likely be resolved in court? I suspect unless your accounts are obviously inflated or their are other irregularities they couldn't automatically treat absense of cash receipts as meaning guilty of tax evasion but it would be useful to have professional legal advice to be sure.
It's firstly important to note that it's extremely rare to get audited outside of audits where they have 'information' or something else shows up that doesn't make sense. These days, audits are a lot more targeted. "And you argue that its unreasonable to expect cash receipts because it's impossible.. would this be a valid defense legally?" - It would not be a valid defence, no. The law is that if you want to write off an expense, you need to prove the amount. If you choose to purchase a product and write it off as tax, without proof, you're choosing to do that. You're choosing to ignore the law. It's also not 'impossible' as you say - It's just a major pain in the backside. They would say "You have 400 different purchases here" - "Are you saying you asked 400 people for a receipt and not one person, gave you one?" That just isn't believable. It would show that you're not willing to even try, which wouldn't look good. The good thing about a ledger, as in the video, is that it shows you're trying to make sure everything is in order, to the best of your abilities. "In whose favour would this likely be resolved in court?" If it got to the stage of court, which is VERY unlikely, it would automatically be in HMRC's favour. The rule is simple. You need proof of purchase. If you can't prove it, you can't write it off as an expense. However, before it got to court, HMRC would do a lot of consideration on if they felt you were purposefully avoiding tax. I would highly doubt it would go to court, even without receipts. They have a lot more information on their end to know if you're smudging numbers. You could argue the rule is unfair, but it's the rule you agree to when trading.
I can see why they do it but they really need to find a solution. Has anyone been audited whilst using this solution that would be interesting to know what happened
Yes that would be interesting - I would like to think they would be reasonable and take each case on it's merits... what Malinky says above is also very interesting...
But if you spent £5 with a stranger in a car boot, the HMRC arent interested in a small transaction like that. Even if you made 5000 of them in the year, they wouldn't be interested. It would cost them more to investigate it. Just keep written records
I know this video is 2 years old, but can I offer a possible solution based on what you appear to be doing already in the video. Simply get Andrea to 'sell you the stuff' with a full inventory listing as logged in your book. She would be able to supply you with a receipt on a monthly or annually basis
Hi Nic. How much detail do you record in your ledger? I log everything I purchase on an excel spreadsheet - every single individual item, which is a massive chore after a successful bootfair trip! I believe this is overkill, and so from this April I will start to just list total spend at that location. Is this what you and others do? No need to break it down into each item? Or do you write a list of items and prices in your ledger and then just note a total spend on a spreadsheet (for ease of totalling up when completing the tax return)? Thank you for the video! 👍🏼
So if you sold 20 items in a week you total up what you paid for the whole lot then take of purchase price postage price eBay and pay-pal fees then your left with the total of which you pay tax on
Nic & Andrea Hills oh so you do list every individual item? I thought I was going over the top by itemising everything. I thought perhaps people just logged their total spend at that bootfair / jumble sale etc. Mind you I itemise each sale too, and record the profit on each item, so perhaps that's where I'm going into too much detail. Takes me bloody ages and I'm Months behind, no wonder I never have time to list 🤦🏽♀️
They are not geared up for the small reseller and have nothing in place for this,it is the very same when you attempt compensation for lost packages with Royal Mail they too ask for a receipt for something that has probably been purchased from a car boot sale. They do not have the answers because they do not live in the real world where receipts are not issued for 50p items !
HI NIC I BEG YOU PLEASE ANSWER: My question is: how do I avoid getting audited/inspected by the HMRC? As long as I be 100% honest I won’t get into trouble will I? Even if I do honestly make not that much profit?
What I used to do was this. Set up a simple spread sheet. Have a column for date, place , item/s description , new, used , photo/ price paid, price sold. Shows when , where, what, condition , how much etc . Then apply the simple add calculation to the bought and sold columns plus a column for expenses ( entrance fee for car boot, ebay fees, paypal fees etc you will have or can get a physical receipt for these) subtract bought and expenses final sold figure and there's your taxable profit.
I suppose you could itemise the thing you bought and then link it to the Ebay listing number so you can give a paper trail from when you bought it and how much it sold for.
The girl was just giving the standard response. If ever audited HMRC would most likely base their checks on materiality, They will be more interested seeing a £300 receipt for new laptop then a £2 one for a boot sale buy.
I still don't think it would be a big issue as long as your showing the £2 items sales/revenues in your tax return or proof that you still have them in stock. Having managed HMRC audits they have always only ever concentrated on the bigger value items due to time constraints :)
There is a solution. Bring a receipt book with you. If people don't want to sign it, then you shouldn't buy from them. Just because the solution isn't one you like, doesn't mean there isn't one.
What HMRC told you is their stance for perfection and totally unrealistic. What Kirsty Walker says is also correct and the best you can do. If you take the bus to a car boot sale, you get a bus ticket, but if you drive all you can do is record the mileage - there's no one that can check and validate it. If you were to sell at a car boot sale, most people wouldn't sign a bill of sale. I have heard of HMRC challenging cash expenditure or income but only when it's wildly unrealistic.
For someone in your position, if you have sold it you must have bought it as it can't all be personal items with the volume you are selling. Given that is the case, unless you are claiming unreasonable amounts for the items, I cannot see your expense figures being questioned. Now, how you handle 'Making Tax Digital' next year is another matter!
Sounds like they are in a bit of a quandary as well.. they can't officially endorse just keeping your own records for cash transactions because they would be worried this would encourage people to invent fictitious receipts to reduce their tax bill. In a way you are in a good position though because legally you have a good reason why you DONT have receipts for cash transactions.
seems you have to be very honest if you buy a item for a pound and sold it for £25 you could say you paid a fiver for it how would they ever know what you paid,or if you brought a rare video game for a fiver took it home played it for an hour that means you are able to sell it as your collection for say £30 and as the RRP price is £39.99 your not selling it above that you pay no tax,How could they ever try and do you for tax when they have no answers on how to go about it LOL good luck great video as always,,,
Exactly - the whole thing is based on trust and honesty - which means those who are unscrupulous could easily take advantage, which is why they are very black and white about it...
HMRC would take situations like this into consideration if you got audited. However, they can tell if you're fudging the numbers on purchase. They do look at things like gross/net profits margins across the industry and if yours don't add up to what's 'normal' - It would make them have red alarms going off. If everyone in the industry has a 60% margin and you somehow have 10%, they would question that.
i know what you mean but say you buy a video game at £1 and it's a rare one that can be sold for £50 whats to say i payed £25 for it and sold it for £50 that's 100% profit at £25 i am not a seller but i bet a lot of sellers do this as there's no prof of what you paid
@belsey - The proof can lay in the profit margins alone. Lets use your examples, removing things like fees. 1) Bought at £1, sold at £50, that's £49 profit. 2) You say you paid £25. That's £25 profit. The first example has a 98% profit margin. The second example has a 50% profit margin. The HMRC holds a lot of detailed data about companies, profit margins, costs all based on the industry etc. If they have data showing that the average profit margin is 94% and your company seems to be doing 50% profit margins across the board, there's room to believe your lying about something.
Just don't worry about it, keep the receipts that you get, i never log anything that i cant it's ridiculous, tax returns are easy don't even worry about them
I don't worry about tax returns - the point of the video is that according to the HMRC if you don't have a written receipt they won't acknowledge the expense - for some resellers this equates to many thousands of pounds of expenses.
But if they can not claim expenses back of a item with no receipt then surly they can not claim the tax back of that item as there is no prof of how much it cost in the first place LOL this is getting a bit mind blowing,
i mean if you want to claim your purchase of the item back and you can not because you have no receipt so they still claim the tax back of the item you sold you loose the amount you paid for the item
@belsey - It sounds like you may be confused on expenses. If you spend £5 to buy a toy and sell it for £20. You don't save £5 on tax as that's the amount you paid for it. You save the taxable amount on £5. So you save £1 on taxes. (If you're taxed at 20%)
Hey Nic, really love your videos (hence why I am harking back to 2017) and I see where you are coming from but on this subject I think there is a case of having your cake and eating it. When you make the car boot, cash in hand purchases what taxes do the sellers pay? Nothing. As a result, the benefit to you and your ebay customer is a cheaper product. If you go to an established trader they have to factor in taxes on their profits/sales taxes, not to mention the admin costs of handling taxation. Why on earth would HMRC reward the business structure that uses supply chains outside their rules? I agree its clearly impractical to request a receipt of purchase at a car boot sale however its equally impractical for HMRC to police that transaction and therefore grant relief. I also don't think its fair to complain about waiting on hold to speak with HMRC about your businesses tax affairs. At the end of the day this is free guidance from HMRC when most businesses are expected to seek independant professional support. Yes it would be great if HMRC could deal with all our taxes but that's only going to happen if the tax rules are ridiculously straightforward which would cause all sorts of inequalities and economic pervisions (i.e a flat rate of tax and no relief on any expenditure which would make your business model less attractive than a hairdresser with minimal expenses). It is still great to see the tax system from the perspective of an independent trader such as yourself. I hope HMRC aren't wasting their time checking compliance with people like you as its clear from your video's you're straightforward and honest in your business practices/appraoch to life. All the best.
Ive been reselling for around 8 yrs. Bout 3 yrs back hmrc did a full check of all my sales records & book keeping. It was a joke ! They had a team of accountants working on 5 yrs worth of book keeping. They was at it for weeks ! Phoning me almost daily.
They didn't want receipts or any records of purchases ! Your waisting your time keeping any hand written records or receipts. Hmrc do have a ebay specialist but your case only gets handed over to the ebay specialist once the usual hmrc staff have had a go at sorting your case. Well that was the case for me anyway ! The usual hmrc accountants treat you like a large corporate business. I had a nightmere finding & printing out all the info they was asking for. After i'd sent in around a 6 inch high pile of documents they spent around 5 weeks looking at them & phoning me asking stupid questions & really getting no where with my case. They then handed it over to the ebay specialist. Basicly this person phoned me & asked why i've sent in all this paperwork? He said its of no use to us & that i shouldnt have been ask to send it. All he wanted was a record of my paypal transations which can be downloaded from paypal in .csv format & sent via email. I wasnt sellin on amazon back when the check was done. Anyway all the ebay specialist did was give this csv file a quick once over to check i'm not making big amounts of money & then closed my case. He sent a letter saying everthing is fine & sorry hmrc messed me about so much. Plus asking permission to destoy all my records ! I got them to return them. Although when they turned up alot was missing so i've just binned most of it now. Seems at the end of the day a downloaded record of paypal transactions is all you need. And for amazon just your monthly takings report for the year.
Techno Crat thank you for sharing the experience and that was helpful . One question If possible could be helpful , what is the definition of big amount of money in PayPal ? And what does he compare it to ? Thank you.
Thing is Nic you are self employed so is your responsibility to get receipts. Obviously with 50p and £1 items there is not much point as this won't be significant on your tax return. I'm sure if someone wants a sale of a more expensive item they won't mind writing a receipt and signing it. You don't need there address. Joys of being self employed 👍
I would encourage people to speak to an accountant. It's worrying how many of the replies here show a lack of knowledge on this and are clearing doing their accounting wrong, which can end in heavy-handed fines.
Hi there Nic, my husband worked for the HMRC for many years, Now we both ebay full time, He says that The information she gave you is not accurate, and you can't force anyone to give you a receipt at a car boot sale etc. What you need to do is keep an accurate record of cash expenses, as you are doing this would be adequate, ask any accountant and they would tell you the same thing. The important thing is to make sure you update your records on the day the items are purchased, or as near as possible.x
Hi, doesn’t that mean that you can completely make up this numbers and they can’t possibly know?
@@lukazupie7220 Yes of course it does. There is no paper trail
I agree. A Flying Squad copper was asked to get a receipt from a drug dealer, whom he was trying to befriend on an undercover operation.
All HMRC require is you be consistent and truthful. Where you can get written proof - do so.
i guess im asking the wrong place but does anybody know a way to get back into an instagram account??
I stupidly forgot my account password. I would love any tricks you can give me!
Gotta love HMRC’s “just be a wee minute”. Good to know it’s not just me that has to wait ages for an answer
We have kept a excel spreadsheet from day one of every penny that comes in and out of our business and so I hope this plus the bootsale logs and other receipts we have will all be OK if ever we get audited. Great vid Nic really enjoyed it and thanks for opening this debate up again.
HMRC lacking a grasp of real world trading conditions, it just encourages people who are trying to do the right thing to give up on being honest.
I wouldn't say it's lacking a grasp of real world trading conditions. Rather, it's a very rare scenario where a business purchase can't have receipts/proof of purchase. It's an isolated issue to a very small group of persons.
I disagree a lot of small business owners buy used items either for resale or for use in there business used machinery, tools etc, many small businesses cant afford to buy everything brand new.
With the growth of sites like gumtree, shpock and facebook selling groups it will get more common people buying used items from private individuals.
@RetroCable - The HMRC doesn't state you have to have a receipt. HMRC states that you have to have proof of purchase and the price. Whilst a receipt is a proof of purchase, it's not the ONLY way to prove a purchase. Proof of purchase can be the outgoing payment on your bank balance.
So for Gumtree and Facebook, you can take a screenshot of the asking price on the website. Then your cashflow statements back up the purchase amount. IE; you pulled out £10 at a cash machine for the £7.99 purchase.
Jane Doorgachurn what about car boots
@@janedoorgachurn7765 Exactly what I do, with this covid situation it helped me not deal with cash and 95% of people took a bank transfer when i collected. I have their name (from my bank statement and facebook if needed but bankstatement helps a lot more) I have the date and the exact amount transferred. So my spreadsheets have something like this... Playstation 4 console / date purchased/ 'jane smith'/ purchase amount / payment source 'VISA XXXX' .... If i buy a bundle off the same person I split into lines for that person and work out a fair cost value for each item. The other 5% with cash i withdraw for example £50 and under payment source i put 'VISA XXXX (CASH WITHDRAWAL) so it matches up the same date on my bank statement. Been doing this for a long time and god i hope this is ok lol!
My accountant said that on every boot sale we should get receipts that you attend ( paying entry fee ) and rest just record as nick shown. At least you can proof that on that days you have been there
Thanks for sharing your experience with HMRC - I am slightly surprised that they have not recognised that a significant number of people will work the way we do and not be able to get receipts - all we can hope is that one day they will make some progress. I am doing the same and simply recording all expenditure and hoping they wont give me grief....
Thanks - glad you enjoyed it :)
Good effort Nick. What I wish you had said to her was - OK so what your saying is if a spend a £1000 pounds at a car boot sale and have no receipts of purchase I cannot claim that as cost of sales right? So that surely means if I sell items at a car boot sale and make £1000 but have no proof of sales then I don't have to pay any tax on that £1000 right?
oooooh - yes that would have been a great line - didn't really want to antagonise them though to be honest :)
@Steve Hitchman Your examples aren't comparable. If your selling £1,000 worth of goods, you're required to keep adequate records.
HMRC rules (whilst a bit annoying) are put in place to stop tax evasion. Your example is flat-out tax evasion as you would be doing it on purpose. (As you're supposed to have the records and there is no reason to not have records.)
Your example is 'Rule to stop tax evasion' VS 'Way to avoid tax on purpose'
You could just send them a link to your channel and give them a list of things you have bought tbh thats video evidence receipts could be forged?
Absolutely. It should work both ways if they aren't interested in any expenses on items there's no receipts for, then surely, any money made from sales of the same or similar items that have no receipts attached shouldn't interest them either! Seems they're only interested when it makes them money, but when you're out of pocket it matters not a jot to them.
Ha ha brilliant. Gave me a chuckle.. Your expressions said it all, I'm never that calm on hoooooooooooooooooooold😬! They said what you expected but thanks for trying for everyone.
hi there new reseller here . This whole thing with purchasing receipts has got me a little worried as I have no recipts like you explained as when you buy from car boot. It’s been 6 years since this video as I can see .
And you are still continuing with your reselling
How did you overcome this issue of keeping records of the value of items that you purchased. I’ml
lol, that music is giving me Vietnam style flashbacks to my own dealing with HMRC
I'm currently "working" with HMRC trying to resolve an issue that has been in the making for no less than three years , they claim I haven't paid two VAT returns and despite showing them the money leaving my account and the payment arriving in there account they refuse to cancel the debt and admit they have mis allocated the funds...
Would you be able to get an invoice pad/book, and once the sale has been made stand back a bit and list what you bought and then get the person to sign it and give them the top copy, it may be a bit of a pain in the neck, but at least you would be protected.
I love the montage of different faces while shaking head on the tune...
good effort Nic! thanks:0)
In your receipt book do you do it as a whole amount of what you spend at the cb or do you do it for each individual spend at a carboot?
Also I would like to ask, if your selling your own items or clearing out do you have to declare that or no?
You'd be better talking to a good Accountant as they know all the rules and regulations of HMRC. Having an Accountant is worth their weight in gold whatever the size of the business.
thanks nick, good helpful video
ive spoken to accountants about this and they said just keep a ledger as you do. I've also heard you're allowed x amount of self written receipts? a ledger is sensible. that's what I do. date time item and cost of all items. its impossible to get receipts from everyone like you said.
Surely if they’re buying from an individual at a car book, they’re not charging VAT on the price so therefore you can’t claim it back?
I worked for a large computer company in the 70's, we could pick up things like fuses and solder from the stores by the handful. It cost the company £5 for every claim by an engineer for parts therefor it was allowed on small cost items as above. The Government changed the rules so it all stopped and we had to present a request for the likes of 5 fuses (cost 10p) to the stores etc. Sheer madness.
I know it means a lot more work but I would log/match the corresponding sale against the cash purchase.
Hi Nic.. I have question for you.. have you a video on insurance fir when selling on ebay. ebay insurance public liabilities?
You could create an invoice from the nice bloke that you met in the pub that you bought all the stock off as a job lot that you have never seen again?? I think his name was Smith
Is there anything along the lines of 'personal asset' and then turning them into a 'business possession' ... say for instance u had a cupboard and then it suddenly used in your business then you decided to sell it. Or an old Toolbox lying about and then its got some value to your business and then sell it with a sales receipt. That's a heck of a lot of Assets
i suppose te main prolem from an hmrc propestive is its open to obuse?
How about getting your own receipt book you fill it out and ask the seller to sign it maybe?
Great video nic, I've bought a GoPro and record my transactions that way for car boots and written books as well. Cover all areas that way.
Keep it then good work.
Have a friend or family member purchase all your boot sale items for you (or own the items at purchase point) , then purchase them all with a dated receipt. They have not made a profit therefore, no tax liability. Now you have your receipt.
Do you pay vat aswell surly your turnover is more then 85k a year
Ehh, so when you work out your profit margin (after fees/p&p/ minus the buying in price) there's no point!!! Do HMRC still accept your profit margins from items you've bought from car boots ect?
Hi Nic, really useful vid, thx. Related to this, I wonder how you account for items bought in one tax year, that are unsold and carried over to the new tax year. Do you carry out a stocktake and show a value on your accounts? Also, when I buy mixed job lots, for accounting, I am recording sales/costs/profits against the lot, rather than sorting the items and dividing by total job lot cost, to get the individual items cost/sales/profit, wonder if this is correct or best way to account for job lots?
Bit late 2 years lol but I will answer, I had these issues and the issues this guy had. Basically what i do is for example i buy say 10 games off 'Jane Smith' from a boot sale for £100. I then record in a book what i bought, there name (luckily managed to get there name every time), the date and split 10 lines into games and split it so £10 per game. I then go home and i use spreadsheets to again enter in my stock, fill in all the information (split 10 lines for the games) and put £10 each, total £100. Then when i stick the games up for sale and say half of them sell for £100 (£20 each) I mark each line green to show its sold. I also have a tab for 'cost of goods sold' this is my expense so i make that £50 expense and for the sake of this example lets say theres no more expenses, my spreadsheets will then show £50 profit. Whole point of this is that i only claim expenses when an item sells (cost of goods sold). This helps not having to declare my next tax year of stocktake, I believe you only have to do this if you are claiming ALL of your stock as an expense (sold and unsold). Otherwise people would go spend 10k of their profits before the tax year on stock claiming its an expense but then realising they have to do a stocktake on there closing stock for the year which can be complicated. I think the way i do it is easier, but both methods work depends on your scale. For example I have paid out £4800 this month on stock, I've claimed I think around £2000 of that as my expense of 'cost of goods sold'. I hope this makes sense! sorry its long.
Maybe you could record every transaction on video.. you can get quick to operate cameras that hang like a pendant around your neck nowadays. If there is any dispute just pull out the video recording of you handing over the fiver for the monkey coin box and there you go. Perhaps not as daft as it first sounds. Video evidence can be used as evidence in court for many different situations. I think after the jury has watched 1842 videos of you handing cash to strangers on a damp field you would have a pretty strong case.. even if you don't know the combination.
Proving items bought from charity shops with receipts is the same, I go in loads of charity shops and buy perhaps 10 items in one, 6 in another, 8 in another perhaps spending something like £70 - 100 and coming home with many dozens of items of all categories but the receipts say things like Dept 1, Dept 6, Dept 9...no indication of what it is you have bought. Some charity shops don't put the items in separately, they add them up then put one sum in the till! and of course, then you have charity shops that cant even be bothered to set the till up so the date on the receipt is 00 - 00 - 2000.If the inland revenue wants to see any resellers receipts then yes they can but making sense of what it was in Dept 4, 7 months ago is another matter!
Darren Bushnall lmao yeah I've noticed this, sometimes they'll put something like a dvd through as 'ladies clothes' lol no idea how that works, I just write on the top of the receipts which items I bought and hope for the best lol
I try to write on the receipts what it was when I get home - at least that way you have a record of what it was.
You should have asked if you could claim the TAX back on the phone call
The on hold clip was funny stuff! I didn't know what a "ledger" book was before this video so will have to get one & can anyone tell me what you write in this? Is it just the Item description and price paid and where / date purchased? Anything else? Do you also record your packaging supplies and fees etc in this book? I think I need to learn more about accounting.
best way to do it is when you get back from a booty see how much you spent and how many items you brought then divide items on how much you spent say you brought 20 items for £50 that = £2.50 each then your have a better average when you sell your items of what to take of the cost price,a bit like nick with hes postage,,,
without receipts they are ineffect saying 100% of your selling price is taxed. i would take a triplicate book with you and get the seller to sign for cash received, where and when paid etc take photo of item.
Interesting vid thanks. What is the situation in the USA? Are they any further forward with their TAX than us??? I know HRMC are worried that we the low earners are screwing them for TAX. When really they should be chasing the bigger fish at the top of the pile who are shafting them for millions.
That means everything that we record on our expense log book is irrelevant.
Kind of but if you had your accounts seized - as can happen in extreme
case - and you have books detailing all transactions (whether cash or not)
they really wouldn't be any grounds for suspicion to investigate further
as long as the figures tally with the tax return you filled out.
A log book is important if you don't have receipts as the HMRC can use it to see if you're smudging numbers.
It would be very hard to smudge numbers on a log book, without catching yourself out somewhere else.
IE; You 'say' you spent £10,000 on stock last year and your sales were £12,000. That's £2,000 profit. (Ignore fees etc for this example.) So can you explain where the extra £6,000 in your bank has come from?
Jane Doorgachurn except you don’t need to ever put it on your bank, question is, can they access paypal?
@@lukazupie7220 Sadly, eBay and PayPal good old times are over. They have changed the rules of the game so from now on, everything goes directly to your bank account.
That second on hold tune seems to be everyone's on hold music. It bugs the hell out of me
Lol, you could’ve listed some items while you were waiting
I know I'm probably asking a stupid question 😊😊 But are they saying that we shouldn't be selling stuff you get from Carboots because we can't prove it?
They're saying you might not be able to write the purchases off as a business expense if you can't prove the purchase price.
Very useful video..
Your bank statements can be evidence to show the cash you took out to buy your goods then i would suggest listing them & totalling up for each purchase eg £5 at one car boot stall £20 at another etc; it's up to you to keep good written record for yourself in case HMRC wants to do an audit for any purpose www.gov.uk/self-employed-records/what-records-to-keep
have u got your left ear pierced? never noticed it b4 but in this video it really stood out for some reason.
Yes - I had it pierced a very long time ago when working in America, it is closed up now but sometimes I pick at the scar and make it red and it shows up more :)
What does your accountant say?
In the absence of any other evidence Nic, what you have to say, via contemporaneous notes, is surely evidence and the best evidence they'll get The assistant to whom you spoke had asked her colleagues but no policy, statute, SI, regulation or case law was quoted as authority for the answer. I've often found that officialdom backs down when you ask for their authority for an assertion - or else they can quote the authority and then I can go look it up. Thanks for enduring the awful "music" in pursuit of this information.
Thanks Anne - yes I know exactly what you mean - and if push came to shove I would argue my case - at least in my case I have 2 and a half years worth of haul videos to show the level of stock I source in this fashion :)
They have to take your word for it simple as that.
Agree that's all you can do. Have read thats what other do
What does hmrc says about the money that traders earn in car boot. They won't have proof of sales.
A trader is technically required to keep adequate bookkeeping records. If they dont, they can get fined if investigated.
Ha ha ha, they use the same "hold" music in government departments in Australia too 😂😂😂
do you know why? they are using a cisco phone system. the music is to calm you down and keep you on the phone. take for instance australia welfare the hold music makes you angry frustrated and want to hang up so they don't have to deal with you as they are not income generated
@@craigr306 Great comment. Makes perfect sense.
lmao so basically if we get audited none of our car boot sale stock will count as an expense and therefore our profits will be much higher and we will all owe a tonne more tax?! I suppose the only option if you really want to do it right would be to only shop at charity shops where you can get a receipt. They really need to look into this! Thanks for making this video! :)
Technically, by the 'rules', yes. However the HMRC have a lot of data that can prove if you're lying about the cost of things.
For example, the data may show that other people doing car-boots for profit in your area are making a 64% profit margin, whilst according to your records, you're getting a 5% profit margin. They can tell by things like that if you're lying.
Not only that it is impractical to write up a receipt at the car boot but also this are private people not businesses. Surely I would NOT give my address and contact details to a random person at the car boot tbh. This is crazy and unrealistic requirement
What we need is some quality legal advice. if you are in dispute with HMRC about tax owed..for example after an audit.. and they argue you owe more money because all cash receipts don't count, And you argue that its unreasonable to expect cash receipts because it's impossible.. would this be a valid defense legally? In whose favour would this likely be resolved in court? I suspect unless your accounts are obviously inflated or their are other irregularities they couldn't automatically treat absense of cash receipts as meaning guilty of tax evasion but it would be useful to have professional legal advice to be sure.
It's firstly important to note that it's extremely rare to get audited outside of audits where they have 'information' or something else shows up that doesn't make sense. These days, audits are a lot more targeted.
"And you argue that its unreasonable to expect cash receipts because it's impossible.. would this be a valid defense legally?" - It would not be a valid defence, no. The law is that if you want to write off an expense, you need to prove the amount. If you choose to purchase a product and write it off as tax, without proof, you're choosing to do that. You're choosing to ignore the law.
It's also not 'impossible' as you say - It's just a major pain in the backside. They would say "You have 400 different purchases here" - "Are you saying you asked 400 people for a receipt and not one person, gave you one?" That just isn't believable. It would show that you're not willing to even try, which wouldn't look good.
The good thing about a ledger, as in the video, is that it shows you're trying to make sure everything is in order, to the best of your abilities.
"In whose favour would this likely be resolved in court?" If it got to the stage of court, which is VERY unlikely, it would automatically be in HMRC's favour. The rule is simple. You need proof of purchase. If you can't prove it, you can't write it off as an expense.
However, before it got to court, HMRC would do a lot of consideration on if they felt you were purposefully avoiding tax. I would highly doubt it would go to court, even without receipts. They have a lot more information on their end to know if you're smudging numbers.
You could argue the rule is unfair, but it's the rule you agree to when trading.
I can see why they do it but they really need to find a solution. Has anyone been audited whilst using this solution that would be interesting to know what happened
Yes that would be interesting - I would like to think they would be reasonable and take each case on it's merits... what Malinky says above is also very interesting...
Technically, there IS a solution. You ask for a receipt or don't buy from them. It's just not a solution that resellers like.
Great video
I suspect they rather you wouldn't claim any kind of expenses on purchases that you have no receipts for. It's too much paperwork for them.
sorry about the last comment but I jumped in part way through.
Great video. Is the Telitubbie pointing to your trolley on purpose?
Perhaps he is trying to tell me something??!
did you realise your showing your FULL address in this video in the background ?
HAHA that made me LOL, The TAT Cave
Be careful though, Gerald Ratner said his company made crap and look what happened to him
If you have an accountant, they should be able to tell you.
Or on the other hand, write a receipt yourself, I know I would.
But if you spent £5 with a stranger in a car boot, the HMRC arent interested in a small transaction like that. Even if you made 5000 of them in the year, they wouldn't be interested. It would cost them more to investigate it. Just keep written records
I know this video is 2 years old, but can I offer a possible solution based on what you appear to be doing already in the video. Simply get Andrea to 'sell you the stuff' with a full inventory listing as logged in your book. She would be able to supply you with a receipt on a monthly or annually basis
But for the paper trail to be 'legal' she would have to declare that 'income' and as she is in partnership with me... not going to help.
Hi Nic. How much detail do you record in your ledger? I log everything I purchase on an excel spreadsheet - every single individual item, which is a massive chore after a successful bootfair trip! I believe this is overkill, and so from this April I will start to just list total spend at that location. Is this what you and others do? No need to break it down into each item? Or do you write a list of items and prices in your ledger and then just note a total spend on a spreadsheet (for ease of totalling up when completing the tax return)? Thank you for the video! 👍🏼
just the basics - what the item was - how much I paid and the grand total.... when compiling my tax return I just total up the entries...
So if you sold 20 items in a week you total up what you paid for the whole lot then take of purchase price postage price eBay and pay-pal fees then your left with the total of which you pay tax on
Nic & Andrea Hills oh so you do list every individual item? I thought I was going over the top by itemising everything. I thought perhaps people just logged their total spend at that bootfair / jumble sale etc.
Mind you I itemise each sale too, and record the profit on each item, so perhaps that's where I'm going into too much detail. Takes me bloody ages and I'm Months behind, no wonder I never have time to list 🤦🏽♀️
no not every individual item more like - 10 x ladies clothing items £10, 25 x DVDs £15, box of assorted toys £5 etc
Nic & Andrea Hills thank you 👍🏼
They are not geared up for the small reseller and have nothing in place for this,it is the very same when you attempt compensation for lost packages with Royal Mail they too ask for a receipt for something that has probably been purchased from a car boot sale.
They do not have the answers because they do not live in the real world where receipts are not issued for 50p items !
HI NIC I BEG YOU PLEASE ANSWER:
My question is: how do I avoid getting audited/inspected by the HMRC? As long as I be 100% honest I won’t get into trouble will I? Even if I do honestly make not that much profit?
Not sure there is a way to avoid it, but if you keep records and pay your taxes they will have no reason to come knocking :)
Nic & Andrea Hills haha thanks Nix I do apologise taxes scare me a little when they shouldn’t
U can self sert nick av been self employed b4. But ages ago
I dont think thats true. the responsibility is to keep records and writing what you paid, the date and where should be sufficient
What I used to do was this. Set up a simple spread sheet. Have a column for date, place , item/s description , new, used , photo/ price paid, price sold. Shows when , where, what, condition , how much etc . Then apply the simple add calculation to the bought and sold columns plus a column for expenses ( entrance fee for car boot, ebay fees, paypal fees etc you will have or can get a physical receipt for these) subtract bought and expenses final sold figure and there's your taxable profit.
I suppose you could itemise the thing you bought and then link it to the Ebay listing number so you can give a paper trail from when you bought it and how much it sold for.
The girl was just giving the standard response. If ever audited HMRC would most likely base their checks on materiality, They will be more interested seeing a £300 receipt for new laptop then a £2 one for a boot sale buy.
I get your point but sell a few hundred £2 items and its as much as a new laptop they will be interested then lol,
I still don't think it would be a big issue as long as your showing the £2 items sales/revenues in your tax return or proof that you still have them in stock. Having managed HMRC audits they have always only ever concentrated on the bigger value items due to time constraints :)
i just record what i spend and put it down as boot fair stock
Love the phone case lol
travis w but that one is pink and has flowers lol
Ha ha - yeah it's Andrea's was filming on my phone :)
Really helpful video. Thank you 🙏🏻
Hmmm, what to do with all the profits that HMRC make it absurddly difficult to record and pay them. Hmmm, what a quandary.......
The HMRC accountants were digging through the archives for the answer.
if they don't have a solution then why should we
There is a solution. Bring a receipt book with you. If people don't want to sign it, then you shouldn't buy from them. Just because the solution isn't one you like, doesn't mean there isn't one.
Jane, signatures can easily be forged. A signature alone is NOT enough, the HMRC would require an individuals address/contact information.
Forging hundreds of different signature is not easily forged. Yes. contact details etc should be on there.
SUBBED GOOD VID GOOD QUESTION, HATE HMRC MUSIC LOL
COULD YOU NOT RIGHT A RECEIPT UP YOURSELF?
I have spread my couch with carpets of tapestry,, with striped cloths of the yarn of Egypt. Proverbs 7:16
That hold music is a killer 😒
What HMRC told you is their stance for perfection and totally unrealistic. What Kirsty Walker
says is also correct and the best you can do. If you take the bus to a car boot sale, you get a bus ticket, but if you drive all you can do is record the mileage - there's no one that can check and validate it. If you were to sell at a car boot sale, most people wouldn't sign a bill of sale. I have heard of HMRC challenging cash expenditure or income but only when it's wildly unrealistic.
For someone in your position, if you have sold it you must have bought it as it can't all be personal items with the volume you are selling. Given that is the case, unless you are claiming unreasonable amounts for the items, I cannot see your expense figures being questioned. Now, how you handle 'Making Tax Digital' next year is another matter!
With the amount of people that seem to be reselling you would have thought HMRC would have come up with a policy to cover this by now.
Yes - I totally understand their reasons, but it leaves us in limbo.
Sounds like they are in a bit of a quandary as well.. they can't officially endorse just keeping your own records for cash transactions because they would be worried this would encourage people to invent fictitious receipts to reduce their tax bill. In a way you are in a good position though because legally you have a good reason why you DONT have receipts for cash transactions.
I can guarantee most car boot sellers will not be paying tax on what they sell anyway interesting tho thanks
seems you have to be very honest if you buy a item for a pound and sold it for £25 you could say you paid a fiver for it
how would they ever know what you paid,or if you brought a rare video game for a fiver took it home played it for an hour that means you are able to sell it as your collection for say £30 and as the RRP price is £39.99 your not selling it above that you pay no tax,How could they ever try and do you for tax when they have no answers on how to go about it LOL good luck great video as always,,,
Exactly - the whole thing is based on trust and honesty - which means those who are unscrupulous could easily take advantage, which is why they are very black and white about it...
HMRC would take situations like this into consideration if you got audited. However, they can tell if you're fudging the numbers on purchase. They do look at things like gross/net profits margins across the industry and if yours don't add up to what's 'normal' - It would make them have red alarms going off. If everyone in the industry has a 60% margin and you somehow have 10%, they would question that.
very true Jane - I would like to think they would take each case on it's merits and understand that many honest traders are in the same situation
i know what you mean but say you buy a video game at £1 and it's a rare one that can be sold for £50 whats to say i payed £25 for it and sold it for £50 that's 100% profit at £25 i am not a seller but i bet a lot of sellers do this as there's no prof of what you paid
@belsey - The proof can lay in the profit margins alone. Lets use your examples, removing things like fees.
1) Bought at £1, sold at £50, that's £49 profit.
2) You say you paid £25. That's £25 profit.
The first example has a 98% profit margin. The second example has a 50% profit margin.
The HMRC holds a lot of detailed data about companies, profit margins, costs all based on the industry etc. If they have data showing that the average profit margin is 94% and your company seems to be doing 50% profit margins across the board, there's room to believe your lying about something.
Just don't worry about it, keep the receipts that you get, i never log anything that i cant it's ridiculous, tax returns are easy don't even worry about them
I don't worry about tax returns - the point of the video is that according to the HMRC if you don't have a written receipt they won't acknowledge the expense - for some resellers this equates to many thousands of pounds of expenses.
But if they can not claim expenses back of a item with no receipt then surly they can not claim the tax back of that item as there is no prof of how much it cost in the first place LOL this is getting a bit mind blowing,
@belsey - Do you mean HMRC claiming the tax back?
i mean if you want to claim your purchase of the item back and you can not because you have no receipt so they still claim the tax back of the item you sold you loose the amount you paid for the item
@belsey - It sounds like you may be confused on expenses. If you spend £5 to buy a toy and sell it for £20. You don't save £5 on tax as that's the amount you paid for it. You save the taxable amount on £5. So you save £1 on taxes. (If you're taxed at 20%)
Keep video evidence of the purchase.
If the purchase doesn't exist, then neither does the sale.
Charity shops are only in my imagination then?:o
@@lukazupie7220 ???
Downfall of the Roman Empire...tax on tax on tax, greed 🔮
Hey Nic, really love your videos (hence why I am harking back to 2017) and I see where you are coming from but on this subject I think there is a case of having your cake and eating it. When you make the car boot, cash in hand purchases what taxes do the sellers pay? Nothing. As a result, the benefit to you and your ebay customer is a cheaper product. If you go to an established trader they have to factor in taxes on their profits/sales taxes, not to mention the admin costs of handling taxation. Why on earth would HMRC reward the business structure that uses supply chains outside their rules? I agree its clearly impractical to request a receipt of purchase at a car boot sale however its equally impractical for HMRC to police that transaction and therefore grant relief.
I also don't think its fair to complain about waiting on hold to speak with HMRC about your businesses tax affairs. At the end of the day this is free guidance from HMRC when most businesses are expected to seek independant professional support. Yes it would be great if HMRC could deal with all our taxes but that's only going to happen if the tax rules are ridiculously straightforward which would cause all sorts of inequalities and economic pervisions (i.e a flat rate of tax and no relief on any expenditure which would make your business model less attractive than a hairdresser with minimal expenses).
It is still great to see the tax system from the perspective of an independent trader such as yourself. I hope HMRC aren't wasting their time checking compliance with people like you as its clear from your video's you're straightforward and honest in your business practices/appraoch to life.
All the best.
Ive been reselling for around 8 yrs. Bout 3 yrs back hmrc did a full check of all my sales records & book keeping. It was a joke ! They had a team of accountants working on 5 yrs worth of book keeping. They was at it for weeks ! Phoning me almost daily.
what did they say about your record keeping for cash purchases without receipts?
They didn't want receipts or any records of purchases ! Your waisting your time keeping any hand written records or receipts. Hmrc do have a ebay specialist but your case only gets handed over to the ebay specialist once the usual hmrc staff have had a go at sorting your case. Well that was the case for me anyway ! The usual hmrc accountants treat you like a large corporate business. I had a nightmere finding & printing out all the info they was asking for. After i'd sent in around a 6 inch high pile of documents they spent around 5 weeks looking at them & phoning me asking stupid questions & really getting no where with my case. They then handed it over to the ebay specialist. Basicly this person phoned me & asked why i've sent in all this paperwork? He said its of no use to us & that i shouldnt have been ask to send it. All he wanted was a record of my paypal transations which can be downloaded from paypal in .csv format & sent via email. I wasnt sellin on amazon back when the check was done. Anyway all the ebay specialist did was give this csv file a quick once over to check i'm not making big amounts of money & then closed my case. He sent a letter saying everthing is fine & sorry hmrc messed me about so much. Plus asking permission to destoy all my records ! I got them to return them. Although when they turned up alot was missing so i've just binned most of it now. Seems at the end of the day a downloaded record of paypal transactions is all you need. And for amazon just your monthly takings report for the year.
Techno Crat thank you for sharing the experience and that was helpful . One question If possible could be helpful , what is the definition of big amount of money in PayPal ? And what does he compare it to ?
Thank you.
Thing is Nic you are self employed so is your responsibility to get receipts. Obviously with 50p and £1 items there is not much point as this won't be significant on your tax return. I'm sure if someone wants a sale of a more expensive item they won't mind writing a receipt and signing it. You don't need there address. Joys of being self employed 👍
I would encourage people to speak to an accountant. It's worrying how many of the replies here show a lack of knowledge on this and are clearing doing their accounting wrong, which can end in heavy-handed fines.
😁 She is Scottish
so you buy for £5 and sell for £10 and the HMRC gets none of it and your complaining :-)
Seems like an awful lot of pissing about for such a small amount of money
If that is there stance then dont put the money you made through your tax return 😂😂😂 simple