Am I Trading or Not?

How to decide if you're trading or not? Generally, you are trading if you: sell goods you have bought for resale make items yourself and sell them, intending to make a profit sell (or buy) goods on behalf of others for financial gain (for example on commission) provide a service and receive payment (whether in cash or in kind) If you are trading you may have to pay Income Tax, National Insurance Contributions and VAT, and HM Revenue & Customs (HMRC) will treat you as self-employed in that trade.

But you are not trading if you:

sell occasional, unwanted personal items through internet auctions or classified advertisements attend a car boot sale once a year to sell unwanted household items Even if you don't need to pay Income Tax you should still check if you need to pay other taxes or duties.

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Essentially, 'trade' is a two-way relationship between a trader and a customer, where the trader provides goods or services to the customer for reward on a commercial basis.

Prince Chidi


To help decide whether a trade exists or not the courts have identified '9 indicators or badges'. It is not always easy to decide even using these 'badges', because a trade may exist even if only 1 or 2 of the indicators are present. Follow the link below to read some helpful trading examples....


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