TomPratt
Newbie
Hi!
I work in the RAF, which constantly gives me some great opportunities to shoot some amazing locations, I often take up squadron activities just for the locations! (Huge benefit of the RAF imo
up there with the tiny living costs on camp!) However with the huge amount of traveling I am constantly sifting through gear to find what works best for me, and I still haven't found that. A byproduct of this is me constantly selling older gear, often on eBay or to local groups/friends. I very rarely make profit on sales as I don't sell new gear often, however I do sell a lot of stuff - I was wondering if these sales count as taxable income? I have been researching sites like this tax calculator but haven't come across much relating to personal sales so I can only assume they aren't taxed? Can someone confirm this for me?
Thanks!
Tom
I work in the RAF, which constantly gives me some great opportunities to shoot some amazing locations, I often take up squadron activities just for the locations! (Huge benefit of the RAF imo
up there with the tiny living costs on camp!) However with the huge amount of traveling I am constantly sifting through gear to find what works best for me, and I still haven't found that. A byproduct of this is me constantly selling older gear, often on eBay or to local groups/friends. I very rarely make profit on sales as I don't sell new gear often, however I do sell a lot of stuff - I was wondering if these sales count as taxable income? I have been researching sites like this tax calculator but haven't come across much relating to personal sales so I can only assume they aren't taxed? Can someone confirm this for me?Thanks!
Tom
Richard G
Mentor
In Australia if you purchase something for work and claim a goods and services tax rebate, then when you sell it you are meant to pass on the goods and services tax component of the sale price to the government. If you buy the last Leica M3 for for personal use for less than $10,000, or as a collectible, for less than $500, and sell if for $31,000 then you keep it all and there is not even capital gains tax to pay.
It looks like the situation is slightly different in the UK. If you sell a collectible for £6000 or more capital gains tax is payable. Such items as paintings antiques and jewellery would attract that tax. But gifts to your spouse do not, and things of limited lifespan don't attract this CGT. The example they give is a clock. Is a camera not less durable than a clock? And a digital camera even more so. Therefore if it was you who paid a fortune for the last production Leica M3 a couple of years ago and you sold it later for ten times what you paid for it, there would be no tax on the profit.
https://www.gov.uk/capital-gains-tax-personal-possessions
It looks like the situation is slightly different in the UK. If you sell a collectible for £6000 or more capital gains tax is payable. Such items as paintings antiques and jewellery would attract that tax. But gifts to your spouse do not, and things of limited lifespan don't attract this CGT. The example they give is a clock. Is a camera not less durable than a clock? And a digital camera even more so. Therefore if it was you who paid a fortune for the last production Leica M3 a couple of years ago and you sold it later for ten times what you paid for it, there would be no tax on the profit.
https://www.gov.uk/capital-gains-tax-personal-possessions
rayfoxlee
Raymondo
Hi Tom
The problem with tax is that is changes all the time, but I do know that HMRC has been looking at eBay with a view to catching those people who are running an undeclared business. This article from the Telegraph:
https://www.telegraph.co.uk/finance...e-sellers-but-when-is-your-hobby-taxable.html
Richard gives a timely warning about the possibility of making money from the sale of a valuable camera, the proceeds from which may be taxed under Capital Gains Tax rules. The annual tax free allowance of £11,700 can be set against any gains from such a large sale profit.
I think the best advice is to keep records of your purchases and sales and take professional advice if in any doubt about the tax consequences of your sales.
Best wishes
Ray
The problem with tax is that is changes all the time, but I do know that HMRC has been looking at eBay with a view to catching those people who are running an undeclared business. This article from the Telegraph:
https://www.telegraph.co.uk/finance...e-sellers-but-when-is-your-hobby-taxable.html
Richard gives a timely warning about the possibility of making money from the sale of a valuable camera, the proceeds from which may be taxed under Capital Gains Tax rules. The annual tax free allowance of £11,700 can be set against any gains from such a large sale profit.
I think the best advice is to keep records of your purchases and sales and take professional advice if in any doubt about the tax consequences of your sales.
Best wishes
Ray
peterm1
Mentor
In Australia it depends on whether you are "carrying on a business" involving the buying and selling of camera gear. If you are then when you buy equipment you can claim it as a tax deduction but when you sell it you should declare the income from the sale. Or if you are strictly buying and selling kit then when you purchase it is stock in trade and when you sell if you make a profit the profit component (i.e. the selling price minus the cost of the item and costs of selling) should be declared.
Its arguably a little more complex if you are "carrying on a business" of a photographer and a wholly incidental part of that is that you sometimes buy and sell equipment. But again you need to be consistent in that when you buy the equipment it could be treated as a deduction against your main income source (which is presumably providing photographic services) and when you sell it you should strictly speaking declare it. That is how I understand it.
If the rules in the UK are similar to Australia and your main source of income is a salary from the RAF (and your photography is only a personal hobby ) then I would say that you are not carrying on a business either as a photographer nor as a buyer and seller of photographic equipment and more likely than not the profit from selling equipment should not be taxed. (Nor losses deducted). And of course by the way if as you say you do not usually make a profit when you sell equipment of course you should NOT be taxed on your sales proceeds given you have actually lost money.
All of this leaves aside issues of VAT / GST.
Its arguably a little more complex if you are "carrying on a business" of a photographer and a wholly incidental part of that is that you sometimes buy and sell equipment. But again you need to be consistent in that when you buy the equipment it could be treated as a deduction against your main income source (which is presumably providing photographic services) and when you sell it you should strictly speaking declare it. That is how I understand it.
If the rules in the UK are similar to Australia and your main source of income is a salary from the RAF (and your photography is only a personal hobby ) then I would say that you are not carrying on a business either as a photographer nor as a buyer and seller of photographic equipment and more likely than not the profit from selling equipment should not be taxed. (Nor losses deducted). And of course by the way if as you say you do not usually make a profit when you sell equipment of course you should NOT be taxed on your sales proceeds given you have actually lost money.
All of this leaves aside issues of VAT / GST.
David Hughes
David Hughes
Hi,
I reckon you need an accountant if you are selling enough to worry about.
But I see it as profit that we/you are taxed on and that means the difference between what it sold for and its cost and so on, like postage, testing, repairs etc.
And I think all of them for the year should be accounted for so that losses on one or two are off set against profits on one or two and so on.
But I'm not an expert but you could look at this; it's about the 1000 trading allowance:-
https://www.gov.uk/government/publi...tax-allowance-for-property-and-trading-income
and perhaps:-
https://jf-financial.co.uk/2018/01/01/1000-tax-free-trading-allowance/
https://www.ftadviser.com/regulation/2018/02/14/q-a-how-trading-allowance-tax-exemption-works/
Regards, David
I reckon you need an accountant if you are selling enough to worry about.
But I see it as profit that we/you are taxed on and that means the difference between what it sold for and its cost and so on, like postage, testing, repairs etc.
And I think all of them for the year should be accounted for so that losses on one or two are off set against profits on one or two and so on.
But I'm not an expert but you could look at this; it's about the 1000 trading allowance:-
https://www.gov.uk/government/publi...tax-allowance-for-property-and-trading-income
and perhaps:-
https://jf-financial.co.uk/2018/01/01/1000-tax-free-trading-allowance/
https://www.ftadviser.com/regulation/2018/02/14/q-a-how-trading-allowance-tax-exemption-works/
Regards, David
Beemermark
Mentor
Not sure what country you in but in the States the answer is yes, maybe.
Back in the day when I did camera shows I had a very good friend who would return home to Japan and buy the latest gear. He did magazine photography of things like flowers and dinners with a 4x5, Ektachrome and Polaroids. But going home he was always buying the latest in 35mm. He would use the equipment at least long enough to meet the tax requirements and then if he didn't like it offer it to me at the depreciated tax value (which was considerable).
If you're buying (and selling) a lot of gear you need to keep a record. Any profit made off selling (what you paid minus what you sell for, plus depreciation, repairs, selling expenses, and so on) if taxable as a business expense. And loss off selling (what you paid minus what you sell for) is deducted from you business income.
You need to decide if the paperwork is worth it. If you're an honest person don't worry about the tax authorities one way or the other.
Back in the day when I did camera shows I had a very good friend who would return home to Japan and buy the latest gear. He did magazine photography of things like flowers and dinners with a 4x5, Ektachrome and Polaroids. But going home he was always buying the latest in 35mm. He would use the equipment at least long enough to meet the tax requirements and then if he didn't like it offer it to me at the depreciated tax value (which was considerable).
If you're buying (and selling) a lot of gear you need to keep a record. Any profit made off selling (what you paid minus what you sell for, plus depreciation, repairs, selling expenses, and so on) if taxable as a business expense. And loss off selling (what you paid minus what you sell for) is deducted from you business income.
You need to decide if the paperwork is worth it. If you're an honest person don't worry about the tax authorities one way or the other.
kxl
Social Documentary
In the US, there is a certain threshold that determines whether your sales are part of a hobby or a business. On ebay for example, the threshold is 200 sales AND $20k per year; ebay automatically sends a 1099k form to the IRS with your Tax ID Number.
Beemermark
Mentor
Ronald M
Mentor
It is only taxable if the government has records.
Robert Ades
Member
I'm a CPA and can answer based on US tax law.
If the equipment has been used for personal purposes and hasn't been depreciated, and you sell it for less than original cost, there's nothing to report. If you sell it for more than cost, you have taxable gain equal to the sales price less cost.
If the equipment has been used for business purposes and has been depreciated then your taxable gain or loss is based on the following formula:
Gain or loss = sales price - original cost + depreciation.
If the equipment has been used for personal purposes and hasn't been depreciated, and you sell it for less than original cost, there's nothing to report. If you sell it for more than cost, you have taxable gain equal to the sales price less cost.
If the equipment has been used for business purposes and has been depreciated then your taxable gain or loss is based on the following formula:
Gain or loss = sales price - original cost + depreciation.
CharlesDAMorgan
Mentor
No. Any chattel with a likely life of less than 50 years is a wasting asset and exempt from CGT. The gear may be older or likely to last longer, but will still be regarded as a chattel.
As to income tax, you are not a dealer (your employment status is utterly clear) and for your sales even to be considered dealing they would have to meet the badge of trade test. Your's don't.
The only people HMRC are interested in are those who are genuinely dealing (running ebay stores as their main activity etc) and not disclosing it.
I am not an accountant, therefore my advice is utterly worthless. If you want definitive advice, pay for it, and then if you are dealing you can set off the cost of your advice against your profits.
As to income tax, you are not a dealer (your employment status is utterly clear) and for your sales even to be considered dealing they would have to meet the badge of trade test. Your's don't.
The only people HMRC are interested in are those who are genuinely dealing (running ebay stores as their main activity etc) and not disclosing it.
I am not an accountant, therefore my advice is utterly worthless. If you want definitive advice, pay for it, and then if you are dealing you can set off the cost of your advice against your profits.
Ko.Fe.
Lenses 35/21 Gears 46/20
If you sell thousands of items and run it as your business, then file this income in tax form.
I you are individual selling your old gear, not speculant, I see no reason to give government money.
I didn't know Riga Autobus Factory is still in business, BTW.
https://en.wikipedia.org/wiki/Riga_Autobus_Factory
I you are individual selling your old gear, not speculant, I see no reason to give government money.
I didn't know Riga Autobus Factory is still in business, BTW.
https://en.wikipedia.org/wiki/Riga_Autobus_Factory
kxl
Social Documentary
You're missing the point. You do not get to decide whether you're a hobbyist or a business. The IRS does.