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Thread: Extra income

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    Extra income

    As part of hobby being in the transport industry I will buy a car of say R 6000. Knowing a lot regarding the mechanical and electrical issues on a car I will do some repairs and road worthy it. I will then sell it for between R12 000 and R 15 000. The profit made in any sale is not cleared with SARS, the question is should it be?

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    Email problem Phil Cooper's Avatar
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    Depends if your conscience says you must declare it to SARS so you can pay tax on it!

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    Mmmmmmm!!!!!!!

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    Diamond Member Blurock's Avatar
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    Do you charge for labour, or is that free? Purchase price + Parts + Labour - selling price = taxable profit?
    Excellence is not a skill; its an attitude...

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    Diamond Member AndyD's Avatar
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    Quote Originally Posted by Willie0100 View Post
    should it be?
    There's often a large difference between what profits someone should be declaring from their hobbies and what they do declare.
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    From what I've seen SARS doesn't see cars as appreciating value items, a car actually loses value every day so I don't think they will hunt you lol... Besides you are talking of a very small amount
    ---There is no traffic at the extra mile---

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    Willie0100 (18-May-12)

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    I thought as much, just want to do the right thing

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    Site Caretaker Dave A's Avatar
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    I've asked something similar of my accountants - if you've got a hobby making income, at what point can it be regarded as a "business".

    They've never really given me a definitive answer other than to say for the issue I pointed them to that the income is so negligible no-one's interested. But if it involves the buying and selling of assets, I suggest the number of transactions a year might be relevant.
    The trouble with opportunity is it normally comes dressed up as work.

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    About 10 a year at the most because I only do this on week-ends. So if I understand this correctly, if you earn a salary and pay tax on it then using whats left to buy something to trade with you got to pay tax again? (Depending the total amounts).

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    Site Caretaker Dave A's Avatar
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    At ten a year, yep - I'd suggest treat it as a business.

    Of course you'll be able to claim expenses - cost of parts, space used, hand cleaner, telephone, all manner of the little sundries one needs for this sort of thing.
    So make sure you keep your slips.
    The trouble with opportunity is it normally comes dressed up as work.

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    Willie0100 (21-May-12)

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