Selling Fees

[surfsunrise]

Just wondering if sellers use a general mark up on products to cover ebay/paypal fees. All seems a bit confusing to me?

[clarry100]

There are other costs that you may incur if you are working at home as a business rather than a hobby seller.

You would have a certain amount of the floor space (as a percentage of your whole house) dedicated to your ebay business.

This means that this percentage can be a tax deduction (if you are declaring your sales income to the tax man).

These are costs such as:

rent/mortgage interest (Interest only component if you have a mortgage)

Electricity

Telephones

Other utilities

Internet

Insurance

Council Rates

There may also be other things that are claimable too.

Storage bins/shelving etc.

Computers (depreciation)

Camera

Desks/tables & furniture you use

Cost of other relevant assets.

And if you use your car to go to the PO every day keep a vehicle log as that expense is also deductible.

Stock value at year end and new tax year beginning is also required. Hence the need for annual stock-take.

It's not too hard to collect all this info. Your tax agent will be able to give detailed advice.

[goodchinagalore]

If considering claiming a percentage of mortgage interest based on floor area as a tax deduction for a home office / study, one should first do the sums to calculate whether it is financially worthwhile or not, as claiming a proprtion of the mortgage interest paif for the family home automatically means that one will be liable for capital gains tax on that proprtion of the floor area claimed, when the family home is finally sold. If it is calculated to be financially advantageous to claim it as a tax deduction with the ATO, then it is advisable to get a registered valuer to value the family home before the claim is first submitted to the ATO, to provide a "capital base" for calculation of the capital gains tax due when the family home is sold. If a proprtion of the mortgage interest is not claimed, then the family home is of course completely exempt from CGT when sold.

Also, one needs to be aware of the "letter of the law", in that if a percentage of the mortgage interest is claimed, the home officce/study for which it is claimed should be used exclusively for business purposes and not used for any other 'non-busineess' purposes (e.g. as a guest bedroom), although the chances of being audited & detected for doing so are of course very low. if randomly audited by the ATO, however, it would be a good idea to remove the fold out bed (& any boarders in residence!) from the office / study before the ATO man visits! Same sort of rules as for investment properties, which if negatively geared should not be used as a family holiday home...

[clarry100]

What you say is all very true.

The CGT we could be subjected to some time into the future will be offset by a fairly large capital loss incurred and on ATO record as a left-over from the 2008 GFC crash. That holds in perpetuity. So if we ever had to invoke it then the loss would be put to good use in that way at least.

Yes the floor area claimed used must be used exclusively for any business. In our case we have set up what was the garage of our house and it will never have a car in it. That space is 100% for our ebay use exclusively.