Sole trader

[Neobass]

Hi all

I am a sole trader and have a separate business and personal account. I also have a joint account with my other half that have a standing order to pay myself a 'wage'.

I sold some personal items I have had for few years through friends and they put the money into my personal account. Some of the items were as much as £1000. These are non business related and have been things I have had for years and decided to sell on.

I used my personal account for personal use, i.e. going out to eat, clothes, gym etc.... stuff that is non business related.

Is this OK to do? I like the personal account as my wife would have a dim view on some of my spending on personal items - I think most men would agree.

Just looking for advice on how I should separate 'personal' 'business' accounts etc..

Thanks.

 

[Mr D]

Sounds like a pretty normal personal account.

 

[Neobass]

But I'm a little concerned that if some of the personal items sold would be deemed something I should pay 'Tax' on?

 

[Aileen B]

If you truly keep business and personal separate (no shared PayPal account or using personal account for business purchases/business account for personal purchases) then there's nothing to worry about and you can use your personal bank account as you wish.

 

[Neobass]

Hi, yes that's how its always been.

It got me thinking as I applied for a mortgage and they reviewed my last 3 months bank statements for all accounts. They queried some of the large deposits in my personal account. I clearly stated that it was for old items they I sold off which they were fine with.

I was just unsure from a 'tax' point of view - if there is a annual limit for selling personal items.

Thank you.

 

[Aileen B]

Hi
The general rule is that if you're selling personal items you don't have to pay tax on them.
BUT
Capital Gains Tax comes in when selling some personal possessions worth over £6,000
I'm no expert on the matter, mainly because I don't have anything worth 6k!
Probably worth looking into if you have high valued personal possessions but other than that no need to worry.

 

[Neobass]

OK that's put my mind to rest, it most expensive item was £4000.

Thanks for your help!