eBay Earners Beware
The thousands of Australian eBay home business owners are under the microscope of the Australian Tax Office (ATO). eBay users who sold over $50,000.00 worth of goods can except the tax man knocking at their door soon, with the ATO approaching the online auction service for information about users and their incomes via the website.
Many small to medium sized Australian businesses sell their products over eBay as an additional sales outlet to their e-commerce websites, and further businesses operate solely on eBay. A survey conducted by Nielsen in 2006 revealed that 52,000 Australians earned their primary or significant income over eBay, and that number is likely to have grown in the two years since this research.
If you and/or your business earned more than $50,000 on eBay in the tax years ending June 2007 and June 2006, you will probably be at risk of the ATO requesting tax payments on the income. Immediate action that you would need to take in this instance is to obtain advice from a qualified accountant.
A spokeswoman from the ATO told Sydney Morning Herald journalist Asher Moses, "This is one of the tools that we use to check that people are declaring their income properly and we do it across a whole lot of industries, not just online trading."
Many eBay users employ the service to sell high value items like cars, computing equipment and home furnishings. In the current economic climate, people are looking to offload items of value for extra cash. One eBay user professed on the site’s member forums, “I have to admit I have a problem with eBay as I love to sell and when stocks are low I look around the house to sell things.”
Professional eBay sellers are the ATO’s highest targets. Many traders run businesses through the site, with their range of products selling through the popular online auctioneers. Members who earned over $75,000.00 in the tax year that ended June 2008 are the first priorities for the ATO’s investigations.
ATO requested that eBay provided them with information about monthly sales data and also membership information (including user ID, registration date) and contact details for high selling users. The data is then matched against bank records to confirm the income. The ATO also obtained information about the names and dates of births of the Australians who sold over the target thresholds. eBay notified its members with an email last week.
A spokesperson for eBay Australia, Daniel Feiler, told the Sydney Morning Herald, "We believe that the majority of eBay sellers do the right thing but I think the simple point is that if you're selling on eBay to a point where you are reaching the threshold where you're required to pay tax and you're not doing it, then you're really stupid.”