Do you have to pay tax on scrap copper?

[stokielee]

Do you have to pay tax on money received from weighing in copper from household cable, Swa etc? I guess you do as we have to pay tax on everything we do nowadays, I am just getting more and more jobs with loads of tat and need to weigh it in soon so just making sure I am doing my books right.

 

[mattg4321]

Yes, if it’s waste in connection with business activities.

 

[littlespark]

Scrap dealers don’t work in cash anymore, so there’s an electronic trail of who they have paid.
Not worth the agro.

 

[LukeD]

I weighed in £90 last week .Its all "on line". Prices are getting better . Funny how 2 British Gas vans in front also weighed in brand new lengths !! Guess they book more for a job and weigh whats left over . Must be a huge scam ??

 

[kropaske]

Do you have to pay tax on money received from weighing in copper from household cable, Swa etc? I guess you do as we have to pay tax on everything we do nowadays, I am just getting more and more jobs with loads of tat and need to weigh it in soon so just making sure I am doing my books right.

Not necessarily. Anything up to £1000 can be treated as trading allowances. So you could run your business as normal and have another "side business" as self employed that only collect scrap. As long its under £1000 you don't need to do self assessment or declare it to HMRC.

 

[stokielee]

Not necessarily. Anything up to £1000 can be treated as trading allowances. So you could run your business as normal and have another "side business" as self employed that only collect scrap. As long its under £1000 you don't need to do self assessment or declare it to HMRC.

So I could basically get all my tat money paid into my personal account then at the end of the year if it’s under £1000 I don’t need to do anything but if it’s over £1000 then declare it as my self assessment.

 

[UNG]

So I could basically get all my tat money paid into my personal account then at the end of the year if it’s under £1000 I don’t need to do anything but if it’s over £1000 then declare it as my self assessment.

Don't forget to factor in the costs involved to deposit the scrap at the dealers

 

[LukeD]

Remember the old "Waste carriage licence " bit !! Its not that hard to be done for carrying waste from site etc .

 

[davesparks]

Not necessarily. Anything up to £1000 can be treated as trading allowances. So you could run your business as normal and have another "side business" as self employed that only collect scrap. As long its under £1000 you don't need to do self assessment or declare it to HMRC.

So I could basically get all my tat money paid into my personal account then at the end of the year if it’s under £1000 I don’t need to do anything but if it’s over £1000 then declare it as my self assessment.

As long as you are confident you can explain and justify that this is a legitimate side business if, and when, HMRC start asking questions.


The correct, legal, position is that you declare it as income the same as anything else.

Im sure many people don't declare scrap money, but I doubt anyone would admit it, especially not online.

 

[nicebutdim]

Not necessarily. Anything up to £1000 can be treated as trading allowances. So you could run your business as normal and have another "side business" as self employed that only collect scrap. As long its under £1000 you don't need to do self assessment or declare it to HMRC.

I don't believe it's quite so simple if the OP is self-employed. Probably best that they consult their accountant.

 

[kropaske]

I don't believe it's quite so simple if the OP is self-employed. Probably best that they consult their accountant.

Or talk directly with HMRC.

Quick excerpt from gov.uk:

If your annual gross trading income is £1,000 or less, from one or more trades you may not have to tell HMRC, however there are circumstances when you must register for Self Assessment and declare your income on a tax return.

Tax-free allowances on property and trading income

Find out about annual tax-free allowances for property or trading income and if you qualify.

www.gov.uk

 

[Dustydazzler]

Get a mate to weigh in the scrap and split the profit

 

[nicebutdim]

Or talk directly with HMRC.

Quick excerpt from gov.uk:

If your annual gross trading income is £1,000 or less, from one or more trades you may not have to tell HMRC, however there are circumstances when you must register for Self Assessment and declare your income on a tax return.

Tax-free allowances on property and trading income

Find out about annual tax-free allowances for property or trading income and if you qualify.

www.gov.uk

I very much doubt the OP's gross income is under £1000.

HMRC would indeed be another option, from whom to seek advice on this matter.

 

[kropaske]

I very much doubt the OP's gross income is under £1000.

It can be if from "side business" only

 

[nicebutdim]

It can be if from "side business" only

Can you verify this? I can find no information from HMRC to suggest you are correct.

The link you posted applies to new self-employment. If a self-employed individual decides to generate additional income from an entirely separate source, they still constitute one self-employed individual and all income would be declared on the same self-assessment tax return, forming their gross income. Gross income for any self-employed individual is the sum total of all earnings and this £1000 trading allowance applies to self-employed individuals with gross income under £1000. Most usually this would be utilised by self-employed individuals who place no value on their time when generating a few £100 pounds on ebay. It is also frequently used when setting up in self-employment and having gross income in the first year of trading, or part thereof, under £1000.

This part of the page you linked to is quite clear:

When you cannot use the allowances​

You cannot use the allowances in a tax year, if you have any trade or property income from:

• a company you or someone connected to you owns or controls

 

[davesparks]

It can be if from "side business" only

As per the excerpt from HMRC which you posted that £1000 limit is gross trading profit from 1 or more trades.

So if you are trading as an electrician and trading additionally as a scrap metal dealer as you suggest then the gross trading profit will be the combined profit of both trades.

 

[kropaske]

Can you verify this? I can find no information from HMRC to suggest you are correct.

I dont think you can find info to every possible scenario on HMRC website. They allow you to run several businesses as self employed and have more then one UTR, or have several ltd companies or be employed and self employed at the same time. So for example in this case i am employed and my taxes, ni and so on are taken care of. I then open another business as self employed collecting scrap. Since i dont earn more then £1000 i dont have to declare it. At least that's how i interpret this.

 

[nicebutdim]

I dont think you can find info to every possible scenario on HMRC website. They allow you to run several businesses as self employed and have more then one UTR, or have several ltd companies or be employed and self employed at the same time. So for example in this case i am employed and my taxes, ni and so on are taken care of. I then open another business as self employed collecting scrap. Since i dont earn more then £1000 i dont have to declare it. At least that's how i interpret this.

It doesn't matter how many businesses you run as a self-employed individual, your combined income from those businesses constitutes your gross income where self-employment is concerned.

If you are an employee, paying PAYE tax, and also self-employed in another capacity, then all of this will be detailed on your tax return. One instance where this £1000 trading allowance would be relevant, is in circumstances described in your last sentence (and in my last post), where a small business is running on a self-employed basis, alongside PAYE employment, and which generates less than £1000 of income. In these limited circumstances you would not have a tax liability on these additional earnings of less than £1000 and may not necessarily have to fill a self-assessment tax return (although you still may have to, depending on what HMRC decide).

As for the OP? Well they 'want to keep their books in order', which suggests existing self-employment, and any additional revenue would certainly be taxable.

No one has disputed the existence of this £1000 trading allowance, nor the fact that many people can benefit from it. What is disputed is your original statement about the allowance and how the OP may be able to benefit from it, for the purposes of selling scrap cable. My original comments stand as does my advice about consulting a tax advisor. It makes no sense for anyone to set themselves up for a tax investigation on the basis of following poor advice to save 20% on a small amount of money.

 

[kropaske]

Just re read on gov.uk couple of times and fair play for @nicebutdim and @davesparks looks like you were right and on this case trade allowances may not apply.

 

[nicebutdim]

Just re read on gov.uk couple of times and fair play for @nicebutdim and @davesparks looks like you were right and on this case trade allowances may not apply.

It could be more clearly worded, but that applies to all matters pertaining to tax.

 

[littlespark]

does this come under tax avoidance or tax evasion?

 

[davesparks]

does this come under tax avoidance or tax evasion?

Failing to declare income would be evasion.