Ebay business ABN and accountant

[perfect_pixels]

Hi everyone. I’ve had a pretty great run when I started my store earlier this year. I average a sale of $8000 in products in 1 month and I have to admit while I have a lot of things down pat I’ve been completely blindsided by the forgetting of government tax on amounts over a certain threshold and I realised I haven’t been tracking anything and if I don’t start now I could face a possible audit and tax fraud for not reporting. I also realise because I buy and sell..there’s a huge amount not accounted for in stock prices for my store. Basically my question is, after I register as a business what is my next step in getting my affairs in order

Any help and information at all would be greatly appreciated. I want to do everything by the book 🙂

Regards NickyD

[Anonymous]

Just wanted to add, did you know the ATO do workshops for small business record keeping.  Held in every state, you can attend them in person if they are practical to get to from where you live, or you can watch Webinars online if not.

There are workshops entitled "GST for Small Business," "Home-based Business," "Payroll" and so on.

I attended one a while ago on Record Keeping (what records to keep for small business).

The link to find out more info is:

https://www.ato.gov.au/Newsroom/smallbusiness/General/Free-small-business-workshops-and-webinars/ 

If you scroll down and click your State, then you can see all the different titles and where they will be held and what dates they will be held, in 2020.  When you've found one you like, click on the date and that takes you to the booking page.

Hope this helps as well as all the other information received above, kind regards.

[perfect_pixels]

Wow this is really useful information. Thanks!

[moov-auction]

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@chameleon54 wrote:

If you are buying stuff privately from garage sales, markets etc. and not paying GST on your stock purchases, you really dont want to have to register for GST if you can help it. This is because you will be paying 10% of your selling price straight to the Government. You may be able to reduce this a bit with any input tax credits you can claim back, but basically a lot of your profit will go to the ATO

   Buyers wont pay you 10% more for your item than some-one elses just because you are registered for GST so it will make your items less competative on ebay.

There is a possible answer. The threshold for registering for GST is $75,000 on a rolling 12 month basis. ( not taxable or financial year ) If your average monthly turnover is $8000 as claimed, you will hit this pretty quickly.

It may be possible to set up a second ebay selling account in the name of a wife, partner or partnership. The second selling account would need a seperate paypal account and bank account in the name of the selling entity and they will need a different tax file number to yours. 

 This is the system I use for my ebay selling. ( under guidance of my accountant ). It is legal, it does work and can save a lot of hassles and money in the long run. It also opens up possibilities with income splitting your ebay income between yourself and your partner either through a partnership arrangement deeming income or more crudely through putting the most ebay effort into the store owned by the partner with least taxable income. Using this system you can sell $150,000 on ebay for two stores before you need to register for GST. This would work for your current $8000 per month in sales.

Its slightly complicated and must be set up correctly. As others have mentioned IT IS ESSENTIAL you discuss this with an accountant before you start.

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You are not the first to mention this option of putting an account in the name of somebody else - this may work if you trust the other person, they are good with money, they operate the business themselves? - what are the rules regarding who operates the other account? For example, can you have the account under a sibling's/father's name and are you allowed to operate the account yourself on all levels and the other person does nothing (assuming they have no interest in selling)?. Like you do all the management from A to Z and all accounting? Then all the profit - will it be yours or your partners and if you have a proxy person and you take all the profit yourself and declare that is income - Is this a loophole? 

[joz15au]

As Chameleon54 said, it is essential to discuss this with your accountant. It is often a fine line between what is legal and tax avoidance. Generally profit is attributable to whoever is named as the owner of the account.

[sugar249]

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@moov-auction wrote:

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@chameleon54 wrote:

If you are buying stuff privately from garage sales, markets etc. and not paying GST on your stock purchases, you really dont want to have to register for GST if you can help it. This is because you will be paying 10% of your selling price straight to the Government. You may be able to reduce this a bit with any input tax credits you can claim back, but basically a lot of your profit will go to the ATO

   Buyers wont pay you 10% more for your item than some-one elses just because you are registered for GST so it will make your items less competative on ebay.

There is a possible answer. The threshold for registering for GST is $75,000 on a rolling 12 month basis. ( not taxable or financial year ) If your average monthly turnover is $8000 as claimed, you will hit this pretty quickly.

It may be possible to set up a second ebay selling account in the name of a wife, partner or partnership. The second selling account would need a seperate paypal account and bank account in the name of the selling entity and they will need a different tax file number to yours. 

 This is the system I use for my ebay selling. ( under guidance of my accountant ). It is legal, it does work and can save a lot of hassles and money in the long run. It also opens up possibilities with income splitting your ebay income between yourself and your partner either through a partnership arrangement deeming income or more crudely through putting the most ebay effort into the store owned by the partner with least taxable income. Using this system you can sell $150,000 on ebay for two stores before you need to register for GST. This would work for your current $8000 per month in sales.

Its slightly complicated and must be set up correctly. As others have mentioned IT IS ESSENTIAL you discuss this with an accountant before you start.

---

You are not the first to mention this option of putting an account in the name of somebody else - this may work if you trust the other person, they are good with money, they operate the business themselves? - what are the rules regarding who operates the other account? For example, can you have the account under a sibling's/father's name and are you allowed to operate the account yourself on all levels and the other person does nothing (assuming they have no interest in selling)?. Like you do all the management from A to Z and all accounting? Then all the profit - will it be yours or your partners and if you have a proxy person and you take all the profit yourself and declare that is income - Is this a loophole? 

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Just remember with this option the proxy as you call them,  will be responsible for all taxes, etc on that second account,  so it could impact their taxs, pensions, etc.

[sugar249]

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***important note***

Public discussion boards ARE NOT the place to get accurate financial advice.  Almost ALL posters on these boards have no formal training or credentials in providing financial services.  You certainly won't get anyone replying who will quote their professional indemnity insurance number.

**disclaimer**

I am one of the posters I warn about in the important note above. I have no formal training in financial matters. I will, however, guarantee the advice I provide (up to the $ value you have paid me for my advice i.e. $0, nil, zilch, nada, nought).

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For the OP this is the best advise provided on this thread,  some other bits of advise, although parts are correct, other parts don't look at the full implications, and don't take into account any of your other personall situation.  Take heed of this,  and discuss every other bit of advise on here with a compotent accountant.