Sole trader wanting to sell personal items

[Music freak]

Hi everyone, I am a sole trader and I would like to sell some of my personal items (which most where bought before I was trading), through my business (yes they are similar to what I trade in) .

A) Can anyone tell me how I record the items in my accounts please?

B) Also is the value entered; the current market value or the actual cost as on the original purchase receipts (from over 9 years ago) ? and

C) Some items are from so long ago I no longer have receipts; how would these items be accounted for?

 

[Music freak]

Hi everyone, I am a sole trader and I would like to sell some of my personal items (which most where bought before I was trading), through my business (yes they are similar to what I trade in) .

A) Can anyone tell me how I record the items in my accounts please?

B) Also is the value entered; the current market value or the actual cost as on the original purchase receipts (from over 9 years ago) ? and

C) Some items are from so long ago I no longer have receipts; how would these items be accounted for?

Thanks in anticipation.

 

[Scalloway]

A) Capital introduced

B) Market value

C) As above.

 

[Music freak]

Hi Scalloway and thanks a lot for your reply. A couple of further questions please?
The items I will be putting in have gone up in value since I bought them; does this matter ?
Do I not have to provide any evidence of purchasing ?
Also is the market value the sale value ? ( I have about 6k's worth at current sale value, some of the things I have the original reciepts)
If these items; which is essentially stock that I will be putting into the business, is capital introduced, is it also regarded as an expense, slimier to purchasing stock ?

Thanks again

 

[Scalloway]

The items I will be putting in have gone up in value since I bought them; does this matter

No. But you could be liable for capital gains tax if there is enough profit.

https://www.gov.uk/capital-gains-tax-personal-possessions

Do I not have to provide any evidence of purchasing

If you cannot provide proof you may have to pay tax on the whole sale price.

Also is the market value the sale value

It is the value when you decided to put the item up for sale. If you end up holding on to it for several months the market value may change.

If these items; which is essentially stock that I will be putting into the business, is capital introduced, is it also regarded as an expense, slimier to purchasing stock ?

In accounting terms there are two sides to the transaction. The purchase of stock which is an expense, and capital introduced, which is money the business owes you.

 

[Victoria_V]

Hi there! If you want to introduce personal items for sale in your business, then this would have to be accounted for or as a purchase that the business is making from you (a cost of sales purchase). This money (whatever the value of the items is) would be money owed by the business to you essentially.


The value that you would use is the market value of when you transferred these personal assets into the business. This market value has to in some way be verifiable either by a third party or by comparing the value of similar items. Only then you can make a reasonable estimate of the market value of these items.


If sell the items at a higher price than what you recorded these items at when you introduced the items into the business and a profit on the sale of these assets has been made, you may have to pay capital gains tax.