Retail Arbitrage

[Greenstate]

Hey All any advice gratefully accepted.
So I have started to buy up clearance items from Tesco for example and I have started selling them on EBay and Amazon with some success. I want to make sure I’m tax compliant at this early stage. I need some advice on the following simplified scenario.

Step 1: I purchase clearance items valued at €100 from Tesco
Step 2: I sell same items on Amazon for €200 with €60 being profit after shipping and fees.
Step 3: I now purchase clearance items for the €200 realized in step 2 and sell for €400 with €120 being profit after fees.

As I am a sole trader who also has a full time job I’m assuming right now I’m liable for income tax on the full profit earned so far €120. Does this logic ring through am I also liable for the CGT.

What about the VAT in the above scenario. I pay 23% to Tesco when I purchase but have not charged VAT to the EBay or Amazon purchasers to date.

Thanks in advance
GreenState

 

[Protocol]

No CGT as these are not assets.

You have earned 60 + 120 = 180 profits.

Your revenue is 600.
Your cost of goods is 300.
Gross profit = 300
Expenses = 120
Net profit = 180


VAT applies after 37,500 / 75k of sales.


If you keep doing this, then I suppose it is a trade.

You add the net profits into your normal Form 12 tax return.

 

[Greenstate]

Thanks Protocol great answer.