Reporting sellers to the ATO

[chinatrader*123]

Does anyone know if the ATO still requires Ebay to report sellers whose yearly sales are in excess of $10,000? I seem to remember an announcement from ebay a year or two ago, but I haven't seen anything recently.

[kopenhagen5]

eBay are required to report all accounts with sales of more than 10,000 to ATO.

Someone even suggested it could be as low as 5,000.

But it is irrelevant as any sales should be declared as income unless being a hobby seller selling items to clear a garage or home.

[performance_parts_clearance_centre]

I apparently hit the $10K mark a couple of years ago, and received an e-mail from eBay informing me that they were supplying details to the ATO.

Tempted to say that if you haven't received such an e-mail, you're okay - but I think I probably went over $10k last financial year, and haven't had an e-mail from eBay, so maybe not...

[thecatspjs]

The ATO currently have a data matching focus on a number of online industries - including online selling including eBay as well as specialised payment systems such as paypal.

Ealier in the year the ATO announced that it was increasing the resources it had focused on these areas as well.

Easily resolved - if you get regularl income via eBay - report it as income to ATO / Centrelink

https://www.ato.gov.au/general/building-confidence/in-detail/data-matching/?anchor=Datamatchingprogr...

[clarry100]

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@performance_parts_clearance_centre wrote:

I apparently hit the $10K mark a couple of years ago, and received an e-mail from eBay informing me that they were supplying details to the ATO.

Tempted to say that if you haven't received such an e-mail, you're okay - but I think I probably went over $10k last financial year, and haven't had an e-mail from eBay, so maybe not...

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Yes we were definitley over the $10K limit last year and never got the email from ebay either.

But according to our tax accountant they are still x-checking. Data matching is getting better each year so as/if long as you continue to fail to report ebay income you will be tracked down and asked to please explain.

Then they will go back 7-years as well. So you will be hit up for all back taxes owed along with heavy fines.

Bottom line is if you are taking income from online selling you are supposed to report it, even if you are under the taxable threshold.

If you also work a regular 9-5 type job then ebay income adds onto that and you will need pay tax on all of it.

[cmcoins2000]

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@clarry100 wrote:

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@performance_parts_clearance_centre wrote:

I apparently hit the $10K mark a couple of years ago, and received an e-mail from eBay informing me that they were supplying details to the ATO.

Tempted to say that if you haven't received such an e-mail, you're okay - but I think I probably went over $10k last financial year, and haven't had an e-mail from eBay, so maybe not...

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Yes we were definitley over the $10K limit last year and never got the email from ebay either.

But according to our tax accountant they are still x-checking. Data matching is getting better each year so as/if long as you continue to fail to report ebay income you will be tracked down and asked to please explain.

Then they will go back 7-years as well. So you will be hit up for all back taxes owed along with heavy fines.

Bottom line is if you are taking income from online selling you are supposed to report it, even if you are under the taxable threshold.

If you also work a regular 9-5 type job then ebay income adds onto that and you will need pay tax on all of it.

Records you need to keepDuring the financial year you'll receive documents that are important for doing your tax, such as payment summaries, receipts, invoices and contracts. Generally, you need to keep these for 5 years.

From the ATO site.

[dazzledayz]

In addition to what Clarry has to say I should add that anyone not registering for an ABN is most likely losing money as a result.

Once you've got that magic number (ABN) you can start to claim every dollar you throw at your business and often a lot more.

There is no need to register for gst until you start earning above $75,000 pa so most should avoid the dreaded BAS.

You would be absolutely amazed at the amount of money you can deduct for business inputs and devaluation of plant.

Car - devaluation, petrol, repairs, rego, insurance etc (using the logbook method is best)

Computers and peripherals - ditto

Broadband connections

Home office - % of your rent/rates, insurances, upkeep etc (even a % of your lawnmower blades lol)

Stock - costs and devaluation

Materials and packaging

eBay costs

PayPal costs

Bank costs

AP costs

I'll stop here but the list is a lot longer and a chat with an accountant will prove very profitable.

The thing is though, a lot of these costs are ones you are already incurring but they are just money down the drain.

Once you go legit, all this cash deducts from profit.

Most won't be up for anything additional in tax at the end of the fin year.

You'll even learn to run a profit and loss analysis and this will help you with your pricing.

Centrelink don't mind if you run a business on the side either - they just require a monthly profit & loss statement.

When you claim all your deductions you'll probably not even lose any benefits.

If you're making an ok profit they may even reduce your reporting requirements.

In this day and age the taxation system is weighted towards business rather than wage earners.

You've already made the decision to be an e-entrepreneur so go legit and go for it!

[clarry100]

They may say keep records for 5-years but the max they can go back is 7-years. And they will.

And once they find something wrong in any one year during an audit they will definitely go back the 7-years.

They will be brutal if you are caught.

Some years ago now a good friend of mine got desk audited and sprung for claiming a $300 calculator that he should not have.

All because the receipt for the calculator was dated after his training course had ended. He had claimed it as a student.

They went thru him like a dose of epsom salts, 7-years back. Found all kinds of stuff wrong.

There were things wrong in previous years as well. They were relentless.

He was not using a tax accountant but doing his own. Therefore he had no professional support.

He ended up having to sell off assets to pay the back taxes and fines. Almost cost him his house.

So definitely be afraid if you are not declaraing income and they catch up with you.

[davewil1964]

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@dazzledayz wrote:

In addition to what Clarry has to say I should add that anyone not registering for an ABN is most likely losing money as a result.

Once you've got that magic number (ABN) you can start to claim every dollar you throw at your business and often a lot more.

There is no need to register for gst until you start earning above $75,000 pa so most should avoid the dreaded BAS.

You would be absolutely amazed at the amount of money you can deduct for business inputs and devaluation of plant.

Car - devaluation, petrol, repairs, rego, insurance etc (using the logbook method is best)

Computers and peripherals - ditto

Broadband connections

Home office - % of your rent/rates, insurances, upkeep etc (even a % of your lawnmower blades lol)

Stock - costs and devaluation

Materials and packaging

eBay costs

PayPal costs

Bank costs

AP costs

I'll stop here but the list is a lot longer and a chat with an accountant will prove very profitable.

The thing is though, a lot of these costs are ones you are already incurring but they are just money down the drain.

Once you go legit, all this cash deducts from profit.

Most won't be up for anything additional in tax at the end of the fin year.

You'll even learn to run a profit and loss analysis and this will help you with your pricing.

Centrelink don't mind if you run a business on the side either - they just require a monthly profit & loss statement.

When you claim all your deductions you'll probably not even lose any benefits.

If you're making an ok profit they may even reduce your reporting requirements.

In this day and age the taxation system is weighted towards business rather than wage earners.

You've already made the decision to be an e-entrepreneur so go legit and go for it!

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And all of those expenses are tax deductible whether you have an ABN or not.

Maybe your accountant needs to do some study.

[lyndal1838]

And if you are claiming deductions for expenses connected with your home office you open yourself to all sorts of problems if you sell the property in the future.

You can certainly be "legit" without an ABN and it will save you a lot of time and money in compliance costs.