Tax

[2611geoff]

Hi , does anyone know the obligation that ebay has to the ATO in reporting gross sales ---are there limits , eg over 10,000 , over 20,000 .

Best regards

[kopenhagen5]

Anything over 10,000 is reported.

But there was talk of it being 5,000 at one stage.

[jellybirddesigns]

Ebay reports anything over $10,000.

Sellers are obliged to declare all income even if it's below that threshold.

Only folks who sell the odd item here and there from their home are exempt (although they may still have to prove it if audited).

The ATO uses a lot of data matching these days, so best to play things safe.

[clarry100]

Yep... EBay currently report over $10k in total sales, and that includes what buyers pay you for postage.
If you are buying stock for resale with the intention of making s profit then all income from $1 is required to be reported to the ATO.
If you are receiving some form of CentreLink payments you are also required to declare the income to them.
If you fail to do this and get caught out by the ever better data matching done by AUSTRAC these days, the penalties can be very harsh.

[2611geoff]

Thanks for the replies , all of what i sell is second hand items that actually are a loss not a profit , how do they claim that to be income?

[jfmgray]

If you are selling your own personal items then you are not deriving a business income.  If you are buying items to sell, then every dollar you derive is classified as income,

[2611geoff]

ok  , makes sense , but i suppose if i bought and sold one item that i made a profit on , i would have to prove that to the tax man ,  as ebay would still need to tell the ATO of gross sales----here we go again.

[lyndal1838]

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@2611geoff wrote:

Thanks for the replies , all of what i sell is second hand items that actually are a loss not a profit , how do they claim that to be income?

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If you mean that you are selling your own items that are used (i.e. second hand) then you could not realistically expect to sell them for more than you paid for them.   And they are not classed as income unless you bought them as second hand items to sell on ebay for a profit.

Ebay has to notify the ATO of your TURNOVER once it is above $10,000...or that was the figure last year....it may be less this year.

It is up to you to prove to the ATO that they were your own items and thus not taxable.

The amount notified to the ATO includes postage so you have plenty of deductions to offset any income....postage, internet charges etc.

Postage is not looked on as being income as you have to pay it out to send the items to the buyer.

[clarry100]

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@2611geoff wrote:

ok  , makes sense , but i suppose if i bought and sold one item that i made a profit on , i would have to prove that to the tax man ,  as ebay would still need to tell the ATO of gross sales----here we go again.

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If you get audited by the ATO they will ask you to please explain.

If you are unable to justify to them that what you are selling is your own personal 2nd hand items you have owned for years and no longer need then they will, by default, assume your are selling as a business and are therefore required to delare it as income.

If you have another primary job where you are already above the tax free threshold then each and every dollar from #$1 will be taxable. If you do not then you may well be under the tax free threshold and not have to pay tax on the income anyway, but it still has to be declared.

If you have been doing this for some years without telling them you will be in some hot water with both them and CentreLink (if indeed you take any payments from them) if they catch you. Be careful as these days with computerised everything its much easier for them (Austrac) to cross check and data match.

[chameleon54]

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@2611geoff wrote:

ok  , makes sense , but i suppose if i bought and sold one item that i made a profit on , i would have to prove that to the tax man ,  as ebay would still need to tell the ATO of gross sales----here we go again.

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Its really fairly simple.

Did you originally buy the items to use around the house for yourself and they are no longer needed ? If the answer is yes, the tax office is not interested.

Did you buy any of the items with the epress intent of re-selling them again for a profit ? If so the tax office wants to now about it.

The reality is that the ATO does not have the resources to audit everyone every year so they tend to randomly pick industries where non compliance has been a problem and target those. One year it could be take away food shops or taxi drivers that deal in cash. The next it could be hairdressers and lawn mowing services. They then conduct a blitz on the selected industries, making sure everyone gets the message through audits and prosecution of as many non compliant traders as possible.

The ATO has been moving towards closer inspection of online sales for several years as it views this area as one where non compliance is running at a very high level. I would expect that ebay and other platforms such as gumtree could be singled out for special attention very soon.

 I may not agree with the way the governments have been spending my money lately, but I have been very careful to declare all of my ebay income over recent years as I genuinly think a bit of a shake out could be on the way.