cybertrader - The ATO and social security departments, released information around six months ago ( June last year, just before 2014 tax time ) that they had requested ebay to hand over details of all IP addresses that had turnover ( including postage ) of $10,000 or more. If a seller operates several accounts from the one IP address these will be picked up and totalled for combined figure. Before this anouncement the figure was $20,000. This does not mean that if your turnover is less than $10,000 you are not required to pay tax. It just means that over $10,000 the ATO can cross reference your stated income with actual income, the same as bank interest, social security payments etc. and ensure people meet their obligations regards tax.
If a person is running a business but not turning over $10,000, they are still legally obliged to include details in their tax statement. The ATO has some usefull information on what constitutes a business. From memory some of the things which relate to ebay include
* you have an ebay store and pay for listing items. ( the free listings in the store package meet this criteria as you pay monthly store fees )
* you purchase items with the express reason of re-selling them for a profit
* you keep regular records of your transactions, postage etc. ( EBAYS STORE RECORDS MEET THIS CRITERIA )
* You conduct transactions on an ongoing regular basis, not just sporadically.
* the items you sell have not been purchased and used for personal use.
This is just some of the list. I cant remeber the rest. Many small start up businesses may be spending nearly as much as they earn on business costs and may not actually be making much taxable profit. All expenses such as postage and packing costs, ebay & paypal fees, stationary and computer expenses including internet connection fees can all be deducted from your gross profit to give a much reduced figure for taxable income.
.OP with your regular feedback numbers ( sales ) and the value of items you sell, you would well and truly meet the ATO,s criteria for running a business. It might pay to talk to an accountant if you dont already have one ...........rather urgently.
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