HMRC attempts to put the willies up Olympic torch sellers

7 June 2012

athleticsYou’ve got to hand it to HMRC. On top of their normal busy workload, ensuring they answer your telephone call inside an hour at least once a week, they have been beavering away writing unnecessary  Briefs about skips. Now, they have even found time to write a release targeted at a fraction of a massive 8,000 people in the country.

That’s right, the latest targets in HMRC’s sights are the Olympic torchbearers. With news that a considerable number of torchbearers are seizing the entrepreneurial opportunity to sell their torch for a pretty penny, HMRC feels duty bound to remind them that, under certain circumstances, there might be a small amount of tax to pay.

Olympic torches were available for torchbearers to buy at a cost of £215, but with the current highest selling item on eBay currently standing at £6,300 , sellers could stand to make a profit. And that profit is what HMRC wants a piece of.

You see, this kind of transaction would normally fall under the capital gains tax (CGT) remit (unless you are in the business of trading memorabilia, in which case we would be looking at income tax) and you could be liable for 18% or 28% tax on the sale of your Olympic torch. It doesn’t even matter if you sell it and donate the proceeds to charity (although you could donate the torch directly), you could still be liable.

However, this is fairly unlikely. First of all, there is an exemption for ‘chattels’ where they are bought and sold for less than £6,000. So unless the sale price goes over that amount, there is no tax issue at all. Even purple_donkey  currently looking at £6,300 plus might still be OK- he is actually selling the torch, the stand and the uniform, so one can only assume the stand and uniform will sell for £200 each, meaning no single chattel was worth £6,000 or more.

But even if the £6,000 limit is breached, there is then a partial exemption to help relieve tax where the item is only a little bit over the £6,000 limit. If the torch sells for £6,300, under the partial exemption rules the maximum gain chargeable will be £500. And once a chargeable gain is realised, it then has to exceed the annual exempt amount to become chargeable to tax- meaning you would have to have generated gains (not proceeds) of over £10,600 in this tax year before you pay a penny in tax. Even assuming this is the case, 18% CGT (the rate for a basic rate taxpayer) on £500 is £90.

I‘m so glad HMRC are using their resources in this cost effective way.

7 comments

  • Alexis
    Or they could keep quiet and there's little HMRC could do.
  • Oliverreed
    @Mike Hock, well put sir.
  • qwertyuiop
    And this, Olympic 2012 team, is why you don't give people torches to keep. Retards. While a fair few celebs were given the honor of running with them, so too was common old joe blogs with rotten teeth who had been nominated by chavvy mates who is jobless so is of course going to want to sell for a nice bit of cash rather than have a piece of British history to cherish forever. And this country wonders and more importantly, cries when it misses out on hosting major sporting events.
  • DragonChris
    +1 for Mike.
  • Mike H.
    @qwertyuiop, people in glass houses mate, calling people retards and then saying things like "chavvy mates who is jobless", doesn't exactly make you look like you're top of the IQ scale does it now?
  • Wonkey H.
    I wouldn't go up against the HMRC, when it was still the IR, I knew of people working there still going after black market racketeers from the Second World War, trying to reclaim the tax and duty on their earnings.
  • Mike H.
    Wonkey, you wouldn't go up against anything, with the possible exception of a wall with your trousers round your ankles down the alley beside a gay bar.

What do you think?

Connect with Facebook, Twitter, or just enter your email to sign in and comment.

Your comment