Request for eBay sales info from ATO and Centrelink

[*wheels*]

Following on from bnwt's link in the Media Reports thread
http://tamebay.com/2011/06/ebay-australia-to-hand-sales-data-to-tax-man.html


eBay Announcement 24 June 2011

***Request for information from ATO and Centrelink***

http://www2.ebay.com/aw/au/201106241036392.html

The Australian Taxation Office (ATO) and Centrelink have each advised eBay that they will be issuing formal requests for information relating to sales by Australian eBay members who sold over $20,000 worth of goods on eBay.com.au during the tax year ending June 2011.
The ATO and CentreLink have indicated that they will request the following information in relation to affected sellers:

    Contact name
    Address
    Telephone number
    Email and IP address
    User ID
    Date of birth
    Date of registration on eBay
    Monthly and annual sales volumes and value
    Power seller status
    eBay store status

eBay is legally required to comply with these requests for information. In addition, such disclosure is also permitted pursuant to our Privacy Policy. We confirm that disclosure will be made to the ATO by August 1 2011 and in accordance with Centrelink's required timeframes. eBay may also be required to provide available bank account information.

For further information regarding the ATO or Centrelink, please visit www.ato.gov.au or www.centrelink.gov.au. Those affected sellers may also wish to consult with their professional legal or tax adviser.

[*wheels*]

http://www.ato.gov.au/individuals/content.aspx?doc=/content/00272051.htm

The sale of goods over the internet has grown considerably. As part of our cash economy work late last year, we data matched records for 30,870 eBay sellers who have made sales of $20,000 or more in the 2009 or 2010 financial years. 10% of sellers had made sales in both years and 318 people made sales of more than $500,000. In 2009, 2,069 people had over 1,000 individual transactions and 119 had over 10,000 transactions.

Through our data matching to date, we have identified around 2,200 sellers who reported fewer sales on their activity statement or income tax return than reported by eBay for 2009. This includes 235 sellers who appear to have under reported by $100,000 or more. To follow up on these initial findings, we have recently commenced a program of more than 2,000 audits and reviews to address potential underreporting reporting of sales by eBay sellers.

In 2010 we also obtained credit and debit card data from the major banks. This provided information for 400,000 businesses (with a turnover of less than $10 million) for the 2009 or 2010 financial years. From this data we have developed cash sales benchmarks for 15 industries.6 These additional benchmarks were released in November 2010. So far this year we have commenced more than 2,500 telephone reviews or visits to taxpayers or their tax agent where the data provided by the banks indicates possible under reporting of cash sales.

Our auditors are also finding that where businesses are outside the relevant benchmark, often those businesses do not have accurate or complete sales records to support their reported figures. We ask that tax agents continue to reinforce to their clients that they must record all their sales as they occur and retain that record.

[*wheels*]

The eBay boards have seen a flurry of posts from sellers who have received notification from eBay that their info will be sent to the ATO and Centrelink. The main complaint is that they have kept no records and are now panicking trying to get their paperwork ready in case they are faced with a tax audit. And this includes sellers with thousands of feedback!

[*wheels*]

I have responded to a few of the threads on the eBay boards and I will copy some of the info here.

Basic Record Keeping for eBay sales

eBay Sales Reports and PayPal Reports will rarely match up because the eBay reports do not take into account whether the sale was paid or partially or fully refunded or whether the payment was made in the same month. It is more accurate for accounting purposes to only record your sales when you actually receive payment.

Print off your monthly PayPal Sales Reports. Login to your PayPal account and goto History > Reports > Monthly Sales Reports. They will give you gross monthly sales paid via PayPal (incl postage received) and monthly total PayPal Fees. You can save them as pdf files for printing and/or excel files if you want to add them to a summary Sales Report.

Print off and/or download your bank statements and you'll have your gross sales paid via internet transfers or cash deposits.

Then print or download your monthly eBay invoices for your total eBay monthly fees paid.

Collect all of your supplier invoices and receipts for all other business expenses and either create a spreadsheet or write them into a cashbook.

Complete a Year End Stocktake - count all stock and multiply the quantity by the cost price.

Now you should have enough info for your accountant/tax agent to complete your tax return!



Disclaimer: this information is given solely from a bookkeeping point of view (I am a contract bookkeeper) and does not take the place of any advice from your Accountant/Tax Agent.

[Liisa-Sx]

Thank you for the info Wheels, very interesting read.

I sure hope those that have not declared their earnings on Ebay correctly or those that have been selling from private websites with payments directly into a bank account have good accountants.

[*Brum6y*]

If Sellers are pushing these sorts of numbers, they should be keeping a reasonable track of their business.  This will, at least, be a wake up call.  If a business has just blossomed through natural popularity and growth, then the Seller might not have realised their transition - but I wouldn't expect there will be a lot of these.

If a seller has been simply 'slack' I would not expect the ATO to go for the jugular - rather make sure the seller gets their act together.  After all, the ATO has a duty to safeguard Government revenue and it would seem more productive to get sellers to toe the line, rather than put them out of business.

But for those who understate by $100,000 or more...?    Hmmmmm.  I can see the big stick being brought out there.

Then again, with Sellers who HAVE maintained good records, it will be interesting to see how 'correct' the figures eBay supply will be.  That's the bit that would worry me.

[*Brum6y*]

I'm with Smee on that ... if Sellers have been doing the right thing (and at that volume of sales, you would expect they would understand the obligation to do so) there won't be too much of a problem.

Brumby, you would be surprised how many "big" sellers the ATO caught last year. I'll see if I can find the report.



Found it, I've started another thread so this one doesn't get sidetracked.

I would not be at all surprised at how many "big" sellers (or "medium" sellers or "small" sellers) were caught out by the ATO ...

"if Sellers have been doing the right thing" - obviously there were a few that weren't...

[*CountessA*]

I very much suspect that some sellers with those high sales figures have been focused on undercutting their competitors, without taking into account that they must pay GST and report their eBay income. They've - in a sense - thumbed their nose at b&m sellers and joined in the hoo-ha about being able to find things online for a cheaper price, but unless they deal fairly with GST and reporting of income to Centrelink as well as to the ATO, they are GOING TO BE CAUGHT OUT.

If there are savings to be made by purchasing online, it must not be at the expense of doing the right thing tax-wise and benefits-wise.

I have to admit I struggle to have sympathy for people who systematically rort the system.

It's different, of course, for sellers who honestly DO sell things from around the house. Collectors who are parting with much-loved items, selling one's own car, clearing out no-longer-needed furniture or clothing - all of that sort of thing is fine. It's not income, and it should be a simple matter to show the ATO that this is the case... no need for an eBayer to panic or worry.

However, when even a cursory glance at the eBayer's completed listings shows that the "selling things from around the house" is simply not credible, I do find myself thinking, "Oh dear - you've been selling like a business, but without accepting the financial and other responsibilities of a business. That is bad, bad, bad."

I agree that where possible, the ATO would probably be wisest to caution the seller concerned, arrange for the money owed to be paid, and give the seller all the information needed for him/her to operate properly. (The ATO website is chock-full of the right information, and an accountant will be able to set the seller straight SPECIFICALLY.)

But where someone's got a history of doing something similar, or has failed to heed previous cautions, or where there is other information that makes it likely the seller was knowingly attempting to defraud on their taxes or to continue to claim benefits to which they were no longer entitled - I am very tempted to say "THROW THE BOOK AT THEM". I have zero sympathy for people selling things that "dropped off the back of a truck", or selling fakes from China (or elsewhere), or selling things they don't have, or selling things while raking in benefits and so on. Deliberate cheats... If they get away with it or can talk their way out of it, I do think it perpetuates a culture of bludging, cheating, deceiving and conning. That can't be good.