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Thread ID: 77971	2007-03-29 07:24:00	Should I run it as a business	george12 (7)	PC World Chat

Post ID	Timestamp	Content	User
536742	2007-03-29 07:24:00	Hey guys I've recently got into the habit of buying and selling computers (a LOT of computers) from auctionplaces etc, and I'm beginning to make a rather tidy sum (nothing to be jealous of, don't worry) - one which I would rather not pay too much tax on. I turn over a lot every month, and I need to know, should I be declaring the profit and paying tax? Same story with GST, I am over the threshold for compulsory registration. Can I just keep buying, and keep selling, and leave it at that? I am not keen on losing ~30% of my profit (income tax plus GST). I'm not pretending to be a business or anything, just listing a whole lot of stuff on trademe really (is what it looks like to anyone). This is all 100% unrelated to PC Care, which I run as a business and pay tax on. What do you think? PS: I don't want to be worrying about a $10k fine for tax evasion or anything while I try and sleep every night.........	george12 (7)
536743	2007-03-29 07:31:00	...Can I just keep buying, and keep selling, and leave it at that? I am not keen on losing ~30% of my profit (income tax plus GST). I'm not pretending to be a business or anything, just listing a whole lot of stuff on trademe really (is what it looks like to anyone). You are buying with the intention of selling for profit. It's taxable income. It doesn't matter whether it's a "business". The Infernal Revenue Department is looking at Trademe. You'll probably be caught if you don't declare the income.	Graham L (2)
536744	2007-03-29 07:32:00	You are buying with the intention of selling for profit . It's taxable income . It doesn't matter whether its a "business" . The Infernal Revenue Department is looking at Trademe . You'll probably be caught . So register GST and start paying income tax? Alrighty, beats a big fine, I suppose . :(	george12 (7)
536745	2007-03-29 07:42:00	Whichever way you look at it, the profit you make from buying & selling is income. As such, you're expected to declare it in your annual return. So it depends on how much of a gambler you want to be? How good is your nerve, in fact? You might get away with non-disclosure for ages. Or you might find yourself caught when there's a blitz on regular TradeMe traders. If you're over the compulsory GST threshold, that sounds like a business to most people. Lots of small ones come nowhere near it. I doubt that you'd get an enormous fine. But it would be hard to convince the IRD that a smart young guy like you really believed he didn't have to pay tax on that money - specially when he's already running a business. Peace of mind versus the dosh?. Edit: Hhmmm. I see Graham has already made the point.	Laura (43)
536746	2007-03-29 07:54:00	You should really talk to your accountant. My feeling is register and declare; on the positive side your costs involved with this little enterprise could invite a bit of tax deductibility? Anyway, you wouldn't want to get caught out if continue the way you are. i.e. there is a difference between minimising tax (legally) and trying to avoid tax (knowingly illegal).	jcr1 (893)
536747	2007-03-29 08:51:00	You should really talk to your accountant . And if you haven't got one, or don't think you need one, get one . . . unless you think you will get a "real" job and work for someone else and won't supplement your income . And the cost of the accountant is an expense so you can claim on it . They are tax experts (well some of them) and you are a computer expert (I think :D )	dolby digital (5073)
536748	2007-03-29 09:16:00	I turn over a lot every month, and I need to know, should I be declaring the profit and paying tax? Same story with GST, I am over the threshold for compulsory registration. Well as you say - compulsory registration. IRDs rules are if you charge money for your activity, regardless of whether you make a profit or a loss, then you have to declare it. If you are over the $40K GST limit, then best you do. Oh joy, you'll get not only stuck with paying GST and tax but ACC as well. Still, you're doing better than me................	pctek (84)
536749	2007-03-29 12:22:00	Well as you say - compulsory registration. IRDs rules are if you charge money for your activity, regardless of whether you make a profit or a loss, then you have to declare it. If you are over the $40K GST limit, then best you do. Oh joy, you'll get not only stuck with paying GST and tax but ACC as well. Still, you're doing better than me................ Heh, turning over a lot a month is deceptive, that's not profit. I won't say how much I make here, but it's not in any remote way close the the GST threshold - just that my turnover is. Paying ACC is rubbish (not saying I don't have to pay it, I mean I shouldn't because I don't need it), the only physical work I do is drive things to the post shop down the road, and go to various auctions. But still, I have to pay my 3%? 1%? whatever it is...... Also, I don't think I need to do the GST, because although my monthly turnover * 12 is above the $50k (it went up) limit, I don;t expect to turn over more than $50,000 in the next year as I will be stopping in around 10 months, which would be slightly less than $50k ....... is that acceptable logic?	george12 (7)
536750	2007-03-29 20:46:00	Heh, turning over a lot a month is deceptive, that's not profit . Paying ACC is rubbish Also, I don't think I need to do the GST, because although my monthly turnover * 12 is above the $50k (it went up) limit, I don;t expect to turn over more than $50,000 in the next year I know the difference . Yes, it is . And you watch them find all sorts of reasons not to pay out too, worse than insurance companies . According to IRDs website the limit is still $40K . Thats tricky, what if you do? You can always register then de-register . We've done a bit of that before . . . . . . . . . . . . . . . . . .	pctek (84)
536751	2007-03-29 20:59:00	Also, I don't think I need to do the GST, because although my monthly turnover * 12 is above the $50k (it went up) limit, I don;t expect to turn over more than $50,000 in the next year as I will be stopping in around 10 months, which would be slightly less than $50k ....... is that acceptable logic?Latest I heard was that you don't need to register until your income, ie nett profit, exceeds the limit.	Greg (193)
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