Buyers Premium at auctions. Justified?

[wwwww]

They can make it very simple if they wish,all transactions on Ebay Oz.,for eg,the buyer is hit with a 10%(or whatever) tax,the goods or services involved doesn't matter. Getting customs,thru Aust Post,to collect GST on goods coming in from O/S Ebay sites is where it gets messy.

Um, no.
1 GST is not payable on used goods (like old coins).
2 Not all transactions on eBay.au involve goods shipped from Australia.
3 When I buy old coins and they include "free post" then how is the postage/handling GST computed and who pays it?
4 What about mixed lots? (like buying some old coins with a new item).

1. Yes they are (as long as the seller is registered)
3/4. It's calculated at 1/11th of the price of items inclusive of GST.

[Basil]

Who knows what will happen but the Govt. is looking at widening the coverage of the GST and possibly at a later stage(after the next election?) increasing it to 12.5% or even 15% .Internet trading and giants like Ebay are getting closely looked at so as Hockey said "ëverything is on the table" which is ominous if he survives Graingate.

[Bigfellani5]

I will clarify the gst rules for all. My past profession was a tax auditor for the ato. So here it all is. The first part is based on sellers who are registered for gst. No gst is payable on bullion providing it is sold based on the spot price of metal and fair manufacturing, on costs and profits added in. As soon as some other intrinsic value is added the bullion item attracts gst and will at every point there after regardless of what is factored into future sales. All coins that do not fall into the bullion rules attract gst. Auction house fees by Australian auction houses attract gst payable by the auction house. The gst on the coin is payable by the vendor. eBay fees are gst free as eBay is not registered for gst as eBay.com.au is an off shore company that does not trade in Australia. Dealers registered for gst that buy from the public can get an implied gst credit on second hand purchases as well as credits on gst paid to other registered businesses.

Anyone not registered for gst does not pay gst on sales but can not get gst credits on purchases.

I will also say use this as a guide only. Before relying on this speak to the ato or your tax professional as I do not work for the ato anymore.

[robbiegal]

Thanks!! very much appreciated!

[nealeffendi]

Um, no.
1 GST is not payable on used goods (like old coins).

Um no.  GST is most certainly payable on second hand goods if the seller is registered for GST.  The ONLY time this doesn't occur with coins is when the bullion value of the coin and the retail value are largely the same.  GST does not apply to bullion.

Most sellers on the bay are small timers, so most are not registered.
I bet the avoided Income Tax by those thousands of sellers is huge and would get the ATOs attention if everything is on the table. Might kill the bay as a source of numi stuff.

[markn]

Most sellers on the bay are small timers, so most are not registered.
I bet the avoided Income Tax by those thousands of sellers is huge and would get the ATOs attention if everything is on the table. Might kill the bay as a source of numi stuff.

Given that eBay (and paypal) can and do supply their records to the ATO some of these "small timers" had better be careful

[robbiegal]

ebay are sending sales records to the ATO now
and they were doing that last year

that is why so many were freaking out about the automatic notification of $20,000 in sales  to the ATO

although I was told that it is actually the non-declaring businesses who turn over much more that they are after

[emu666]

ebay are sending sales records to the ATO now
and they were doing that last year

that is why so many were freaking out about the automatic notification of $20,000 in sales  to the ATO

although I was told that it is actually the non-declaring businesses who turn over much more that they are after

They've been doing it for about 5 years.
If you've behaved yourself and confessed all to your accountant, you have no problem.

[markn]

They've been doing it for about 5 years.
If you've behaved yourself and confessed all to your accountant, you have no problem.

I think this is a key point.  Play above board and you'll be fine.  Remember the GST limit is just TURNOVER, not profit.  So, even if your little eBay business only makes a thousand dollars profit a month but you turn over $6500 a month then you need to pay GST.

[robbiegal]

thanks

[Steveqld]

My understanding is that if your turnover is less than $75,000 per annum (which corresponds to Mark's comment about $6,500 per month) then you don't need to register for GST.

If you are not registered for GST then you can't claim GST credits but you also don't charge any GST on sales.

I have absolutely no worries about coming close to that amount so I treat it as a hobby.

If the ATO wanted to start treating it as a business then I'd be claiming deductions everywhere eg Ebay fees, a proportionate costs on rates and utilities for a room in the house, part electricity, deductions on the computer, mileage to get to the banks, bank fees etc, etc.  I wouldn't be paying much tax.

[dcoin]

As more and more auction houses move towards online selling platforms the question is the premium still justified in that case, American auction houses suggest it is, having said that their sellers + buyers fees are typically less than australian auction houses.

[markn]

As more and more auction houses move towards online selling platforms the question is the premium still justified in that case, American auction houses suggest it is, having said that their sellers + buyers fees are typically less than australian auction houses.

As online auctions here become more and more popular in Australia I think you'll find that the room auctions here will need to have a much stronger online element AND lower fees.  Or they'll go broke.

We buy quite often from auctions in the USA from auction houses that have beautiful catalogues that they mail for free, a great online catalogue, and a room auction that is very accessible to online bidders.  And their premiums are a lot lower than room auctions here.

[Bigfellani5]

I have absolutely no worries about coming close to that amount so I treat it as a hobby.

If the ATO wanted to start treating it as a business then I'd be claiming deductions everywhere eg Ebay fees, a proportionate costs on rates and utilities for a room in the house, part electricity, deductions on the computer, mileage to get to the banks, bank fees etc, etc.  I wouldn't be paying much tax.

The hobby vs business argument. Well because you say it is a hobby does not mean it is. There are countless court cases where one transaction was deemed a business. Low turnover does not mean it is a hobby. As a rule of thumb if you buy stuff and resell it with the intention of making a profit on any sort of regular basis you have a business. This is different to buying something for a collection or investment then selling it years down the track. In this case you are probably not a business then capital gains tax might be your issue.

The thing that gripes me about all auction house fees is auction houses get a bigger slice of the pie than I do. I am lucky to make 30% on most things and they get more than me for no cash outlay.

[robbiegal]

hi Bigfellani  just went to your website but you don't have photos of the pre-decimal coins that are for sale or is there something I need to do to get the photos? There's plenty of mint product pics