Interesting Story from the UK

[i-love-my-sheep]

http://www.telegraph.co.uk/finance/personalfinance/tax/11077630/eBay-users-warned-to-declare-income-...

[cq_electrical]

Looks like I quit selling at just the right time then, doesn't it? 🙂

Of course, this is the UK we're talking about and things are a bit different here.

[nevillesdaughter]

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@cq_electrical wrote:
Looks like I quit selling at just the right time then, doesn't it? 🙂

Of course, this is the UK we're talking about and things are a bit different here.

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Not so different really. My accountant was an ATO investigator prior to setting up his practice and says that as far as the tax department's concerned "if it looks like and acts like a business - it's fair game for an audit and it's up to the trader to prove it's not."

Contrary to popular myth, no minimum trading limits (in dollar terms) apply, and the ATO watch eBay constantly - even to the point of buying items as evidence!

At the very least, it pays to keep good records (even though this could be construed as "acting like a business") because the penalties are often more than double the assessment of avoided tax.

Another thing to consider is the competition - angry competitors who may be legitimate traders will "dob in" fellow eBayers they suspect of flying under the radar, ant the Tax Dept is obliged to follow up on such info......

[extra-keen]

It pays to be upfront with the tax office with income. However as stated in the article, people selling off unwanted household items don't need to declare and shouldn't worry.

Those folks who are selling as a form of income, like myself, need to keep good records. I've been selling seriously for around 5-6 years and declaring my income over that time - and for the first time last tax year I  had to pay a bit extra tax. That's good - it means I am operating a successful business that is making a profit. Not a huge profit, but enough that I can share it with other Australians who need it. Isn't that what paying tax is supposed to be all about? Paying for schools, health, roads etc. Without it we'd be in a sorry state.

[i-love-my-sheep]

Totally agree! I know the article was from the UK, but a lot of it applies here as well. Tax is tax is tax, regardless of which country you reside (for the most part). If you earn an income, you have to pay tax.

I look at it this way, if you have a regular job and an eBay job, then it's no different to having 2 regular jobs. Unless of course you are just a mum and dad seller selling off stuff to get rid of it. I think once you start buying stuff to sell and make a profit, then it should be declared as income if it's a regular thing.

Most of what I'm selling is stuff I bought a few years back with the intention of making jewellery to sell at the Sunday markets. That never came to pass. I see that as getting rid of personal items. However, the last few weeks I have bought a few things to resell and I see that as a second income (albeit a small one). 

Most of what I bought is to hopefully draw attention to my other stuff while I'm getting rid of it. It (hopefully) won't be a long term thing. Once my original stuff is gone, that will do me selling for awhile I think. I'll still be declaring any income I get from the recently purchased stuff on my tax next year (even though I don't think it will affect my return very much, if at all). I'd rather be told I didn't need to declare it than find out later I should have and cop a penalty of some sort.