Tax Question & Answer
I have been having a clear out recently. I have sold some of the things I am getting rid of through boot sales. Do I have to declare the income I have received for this?
Selling items for profit will normally be considered trading income. On that basis selling your unwanted items at a boot sale looks like a small self-employment which would require a tax return. However, there are two exemptions that may allow you to avoid having to complete a tax return to report this income.
The first depends on whether this is a one-off happening or a regular event. As well as being an activity undertaken with the intent of achieving profits, a trade must also have some degree of regularity. If you are only going to one or two boot sales to sell a few personal items, then you are almost certainly not trading for tax purposes. If you are going to boot sales every week and actively seeking items to sell, then that will be considered trading for tax purposes. There is no definite line between the two, and HMRC will look at your activity as a whole when determining if you have a self-employed business.
The second exemption depends on how much money you are making from these sales. There is now a £1,000 trading allowance in place. This is to save both taxpayers and HMRC from having to deal with small self-employments where there is minimal tax at stake. If your total income is below £1,000 then you do not have to register to complete a tax return. If your income is above this figure, then you will need to register as self-employed and complete a tax return to report your takings. If you do have to register because of this, you can opt to simply deduct the trading allowance to determine your taxable profit or you can choose to use the actual expenses of trading instead.
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