Well you may call it a "hobby" but I suspect that the ATO may disagree with you on that one.

If you are audited they will ask you to show just cause as to why they should consider it a hobby rather than a business. It will be up to you to prove its a hobby as opposed to them prove its a business.

Remember if you buy items (or make them) and then resell them with the intent of making a profit then its a business. If it looks like a duck, walks like a duck and quacks like a duck....

If you are selling off old stuff from your shed or your old clothes then its clearly a hobby.

If your gross sales are over the notional $20K per annum (currently) then ebay are obliged to report your sales to the ATO, so they will know about it.

And if you also have a regular 9-5 type job then all income derived from the "hobby" is reportable as income "from any other source". eg bank interest is reportable income. The ATO know about it because the banks are obliged to report it to them from dollar 1. So why do we declare our $50 bank interest earned this tax year? Why would you not declare your $5,000 from sale of clothing this year?

As technology improves the ATO are getting better at data matching so its only a matter of time before they catch up with tax avoidance (non reporting of income). If you believe that you will not be subject to having to pay any tax then its far better to declare the income in the long term and pay no tax. It's then above board and on the table, no worries at all.

I would strongly urge you to speak with a good tax accountant about this. I believe you may be skating on thin ice, so to speak.

Take care they because are ruthless if you get caught.

Well Lyndal - over the last few years or so, I have been all those different sizes (from 12 to 18), plus there are a few from my daughters. I have never purchased clothes specifically to sell. But now I am retired, I don't have any need for the bulging wardrobe, since I now live in jeans..

Clarry - I have only ever exceeded $2000 profit per annum twice in the years I have been selling on ebay - and one of those years was when I sold a lot of furniture. So I am nowhere near the $20K, (or even $5K in my best ever year). I don't buy items (or make them) specifically to sell on ebay. They are all from my personal possessions, or from my daughters. Now I am retired, I have no furrther need for many of the items in my wardronbe. When I was working, I was a prolific buyer of clothes. But to set your mind at rest, when I get my tax return done in the next month or so, I will mention my fantastic earnings from ebay to the accountant.