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Posts Tagged ‘Online store’

Online Ebay store as a business

Posted on: April 28th, 2016

Over the last three years, John who is a self employed mechanic has also built an online Ebay store which lists and sells second hand car parts. His online business compliments his mechanic shop very well and provides him with an outlet for used parts that would otherwise be waste.

Johns’ Ebay business is growing very successfully and he is starting to earn sales revenue of $80,000 per year, which is in addition to his shop.

John has registered his Ebay store with an ABN and business name. However, he does not include the income from his online sales, but he does claim the GST credits on his purchases.

John is carrying on a business and is avoiding his tax obligations by:

  • not reporting all his income
  • claiming the GST credits for the online portion of his work.

John should immediately amend the relevant income tax returns to include his online sales.

The ATO has a number of other examples of online business: https://www.ato.gov.au/Business/Starting-your-own-business/In-detail/Getting-started/Online-selling—hobby-or-business-/?page=3