New HMRC Guidance: Digital Platform Sales Reporting

Digital platform operators that enable individuals or businesses to sell goods or services will benefit from new guidance from HM Revenue and Customs on their compliance duties under the OECD Model Reporting Rules for Digital Platforms.

The rules require digital platforms within the UK (and other participating jurisdictions) to report information about the income of sellers on their platform, for the purpose of enabling HMRC to exchange information with other tax authorities. The range of sellers the rules are concerned about includes those who sell goods, rent out buildings and those that provide personal services.

Government says the rules (which came into operation on 1 January this year) will also make it easier for sellers on these platforms to comply with their tax obligations; and help HMRC detect and tackle tax evasion when they do not.

Information gathering

Sellers, for the purposes of the rules, are individuals or businesses who sell goods or services on digital platforms - even when they do not directly offer them.

A digital platform is a website or app that connects sellers to customers; and is one that knows or can easily find out the amount paid to sellers for goods or services

The rules do not apply for sellers with fewer than 30 sales of goods or receive less than £1,700 for those sales.

The platform operator will be required to collect specific information about individual and corporate sellers, including tax identification numbers; and to report each year’s information to HMRC by the end of the following January. (This is to be done through a digital platform reporting service.)

Digital platforms are warned that it is their responsibility to ensure due diligence is done correctly, even if they use a third party. Sellers on digital platforms are advised to keep up to date with their tax obligations. The guidance can be found here https://www.gov.uk/guidance/reporting-rules-for-digital-platforms

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