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JacobR

Returning a guitar - need finance advice?

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Hi everyone. I recently bought a 2018 Gibson Les Paul in a beautiful worn cherry finish - except the guitar just didn't do it for me. So under the shops policy I returned it, and was refunded. I'm a full time student and work part time, so I'm trying to get the best guitar for what little money I have. I read that any money coming into your bank is subject to income tax - and I can't find much online about it so I'm a little confused. I earn not much less than the personal allowance amount here in the UK according to this [url=https://www.income-tax.co.uk/]tax calculator[/url], so any extra "income" will put me into the basic tax band, which I'd rather not have happen. So my question is, does the money coming back into my account count as income? It was paid for in cash (recently sold car for cash and didn't have the time to put that in my bank) and has been refunded into my bank because they didn't want to refund me in cash. Hope someone here has been in a similar situation and has some advice :) Thanks, -J

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I'm in the US and not familiar with UK tax laws, so having said that...

 

The money you got from returning your guitar is clearly NOT income. I assume they refunded the exact amount that you paid, so you did not "profit" in any way, and I can only presume that the money you used to buy the guitar in the first place had the rightful tax amount extracted before landing in your hands. So to me, it seems extremely unlikely this will be a tax liability for you.

 

Us Yanks were not fans of the Crown's tax policies, it caused a little dust up a while back.

 

...recently sold car for cash
In the states, this would only be taxable "income" if the car was sold for more than it was purchased for (for example a vintage, antique or colletible car), in which case the amount above the purchase price is taxed as "capital gains".

 

 

 

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I don't believe it would count as income since it is a refund of cash paid. You Brits have a very different set of rules, but I don't see how a refund would be construed as income.

I strongly suggest, though, that you talk to someone at your bank to get this clarified, rather than asking a bunch of musicians!

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Yeah, that's not income. If you're a professional musician and you claim the guitar as a cost you'll need to reverse that with the credit.

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It's not income.

 

However if HMRC or your bank starts crawling through your finances to figure out if it's unpaid income, especially if it's from the same bank the store's employees are paid by, do keep a receipt from them to show it's not income but a refund.

 

I noticed your link - I personally use this tax tool for my finances.

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