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Do I have to declare income from car boot sales?

I recently held some pitches at a couple of car boot sales to get rid of unwanted children's clothes, toys and various other items. I am a self-employed hairdresser and have to complete a tax return - will I also be taxed on the £350?

Your income from hairdressing is taxed because you are running a trading business with a view to making a profit. Selling goods at car boot sales is potentially also trading income, however each case must be considered on its own merits.

For somebody like yourself who has only sold their own unwanted second hand goods on a couple of occasions, HM Revenue and Customs (HMRC) would not deem there to be a trading activity so the income received would not need to be declared on a self-assessment tax return. As the income is not declared, relief for any associated expenses incurred (such as pitch fees and petrol/motor costs) cannot be claimed.

On the other hand, if somebody regularly attends car boot sales (for instance every month) with a view to making profits, HMRC will deem them to be trading and they would need to be registered as self-employed for tax and National Insurance purposes.

However, HMRC have recently introduced a £1,000 allowance, whereby any trading business doesn’t have to register or declare income where it doesn’t exceed £1,000 in a year. If they earn above this then they will then need to become registered and declare the income. If this happens then they also get the choice whether they want to deduct the £1,000 allowance off their income or deduct actual expenses (whichever is greater) to arrive at their taxable profits for that year.

If you are uncertain whether you will be deemed to be trading, we will be able to advise you based on your specific circumstances. Please contact us on 0800 0523 555 or use our simple online contact form to arrange a free initial consultation.

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