Income tax from skip material

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brndmr12

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Hi all

My name is Brendan and I’m new to the forum. I would like to submit a query in the hope that someone will give me some guidelines.

So the company that I work for in the pharma industry has moved to virtualization and cloud computing and consolidated a large datacenter into a smaller one
and in the process got rid of about 20 servers and data storage units (some older , some semi-new, some defective). They used a specialized company to shred all disks and flash memory containing data but decided to dump the bare server hardware as they are not interested in selling them second hand (it’s a large bureaucratic US pharma outfit not interested in going through some hassles to recoup a few extra €€€). Also while there is an internal program to donate old PCs Laptops to schools and charities there is no program for servers and storage, so this material was going to be dump in a skip with other old material from the decommissioned datacenter. Before they got into the skip I asked my manager and recovered about 10 servers, brought them home bought some parts and was able to regenerate 8. I want to keep two units for home use but what happens if I sell the other 6 units? In the current state their value is between 5 and 6 grand and a small dealer that I know is interested in buying them from me. Let’s say that we agree on 5 grand total , is there any income or CAT tax that I would need to pay on the sale ? So as mentioned in the title, these servers were basically rescued from the skip, fixed, re-generated and would like to sell them on. It’s a nice Xmas windfall

Thanks in advance for any input !!!!!
Brendan
 
Hmmm ... EUR5k each and 6 to sell? If it were much much lower amounts, I would categorise it as a hobby. (I know there are new rules re hobbies too but ..)

But at a EUR30k windfall, I'd be inclined to look at the tax impact which would be the profits (sales less costs of repairs) by the rate of taxes on your payslip - - likely, usually marginal rate and USC i.e. over 50%.
 
Hi Setanta thanks a lot for the info. No no no no look it's about 5000 € in total not per server. Do you think I need to pay something on that 5000 €€€ gain ? For sure I spent a couple of weekends fixing them and some bucks on spare parts etc. If I have to pay the taxman over 50% on the profit it's like a gun point robbery. I was planning on taking 10 days off in February and go to Las Vegas with the cash. If I only get 2500 € I will barely be able to afford the flight and the hotel and have to eat at McDonalds. Is the tax man really interested in chasing me ??? What do you think here ? You read in the news these days about all these corporate gangsters, paradise papers and then Panama papers and Luxemburg papers and Apple paying zero tax and should I be worried here about paying some tax on stuff rescued from the skip after spending at least 4 weekends working hard to fix those servers and also spending money on spare parts?

Thanks
Brendan
 
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I suppose you could argue that

1. The sale of the servers is a one-off transaction as opposed to a regular occurrence and therefore isn't taxable under the Income Tax regime but under the Capital Gains Tax system

and

2. The servers are wasting assets with a useful life of less than 50 years so therefore no CGT applies

so the money is therefore tax-free

That would be my gut advice at 1am!
 
brndmr12 said:
spending at least 4 weekends working hard to fix those servers and also spending money on spare parts?
Click to expand...

Spending time working hard is what we all do for income which is then taxed according to our circumstances and level of income.

The fact that it's at weekends on top of a regular job makes no difference. The expenditure on spare parts is allowed when calculating the taxable income.
 
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