Newbie Help Please

[cah1234]

Hello,

Please excuse me if my questions sound a bit stupid.
I looking to buy a few web domains and then sell them.
Is this allowed and do you need to pay tax or let anyone know you are doing this etc?
What would the process be for me to do this and what would the costs be.
Any other info you could provide would be great.

Kind Regards

Chris Hamilton

 

[Aiden Roberts]

Hello Chris

My advice would be to spend some time reading up about the domaining business. Yes you can buy and sell but that is easier said than done and yes depending on where you live you will pay taxes if you are running a profitable business.

Good Luck

Aiden

 

[cah1234]

Thanks. So if I was to sell 1 or 2 a month would I need to pay tax on this?

 

[chrisduggan]

http://www.hmrc.gov.uk/incometax/taxable-income.htm

You will not make much of a profitable business from selling "1 or 2" domain names a month. What sort of domain names would be looking at buying and selling? And why?

If you expect to register a domain name and "flip" it for a profit, you may need to reconsider your business model. Time is money, time better spent on productive things, not trying at best to trade the odd domain name.

I wish you every success, please have a read up and ask questions etc before wasting any money.

 

[Edwin]

This may also be applicable
http://www.hmrc.gov.uk/cgt/

 

[cah1234]

Thanks guys.
Im not looking for this to be a business. I was just thinking of doing it as a bit of fun and to make a little bit of extra cash.

 

[websaway]

This may also be applicable
http://www.hmrc.gov.uk/cgt/

I think if you offset the renewals against income the gain from sales is treated as income and liable to income tax rates as opposed to capital gains tax.

 

[Edwin]

I think if you offset the renewals against income the gain from sales is treated as income and liable to income tax rates as opposed to capital gains tax.

It depends a lot on how you structure the business. Remembering that I am not an accountant, it's like art - if you sell a couple of artworks, then you pay CGT, but if your business is buying and selling art (i.e. you're an art dealer) then the tax situation is different.

 

[djbw]

If you're buying them with the intention to resell then that's a business. I've found it worthwhile registering as self-employed as costs can be offset against profits AND you're not worrying about the taxman!
If you believe you will earn less than about 5k a year through it you can apply for a National Insurance contributions exemption certificate, making the only issues keeping records
Despite making a loss in my first year, it's money already gone and I believe I'm subsequently due a small rebate because of tax paid from my day job.
Do it because it's free, a legal requirement and likely to be beneficial up until the point it's actually worthwhile!