HMRC has published a consultation that outlines plans to implement reporting rules for digital platforms first put forward by the Organisation for Economic Co-operation and Development (OECD). This consultation was first announced in the Budget 2021.
In February 2020, the OECD consulted on proposed rules setting out how digital platforms should collect information about the income of sellers and report it to tax authorities.
Under the new rules, websites and applications based in the UK will be required to report sellers’ income arising in the previous calendar year to HMRC. The reporting deadline will be 31st January of the year following the calendar year.
HMRC stated that the new rules will improve international co-operation in regard to the exchange of information for tax purposes. They will also allow HMRC to access data from platforms based outside the UK quickly and efficiently, which should encourage compliance and increase the visibility of transactions.
Whilst the rules themselves have been agreed internationally, but there are optional elements and they d not prescribe how they should be implemented.
The rules will also help taxpayers to get their tax right and will assist HMRC in detecting and tackling tax non-compliance.
The Consultation is targeted towards gaining input and opinions from ‘digital platforms that facilitate the provision of services, such as taxi and private hire services, food delivery services, freelance work and letting of accommodation, as well as those that facilitate the sale of goods and transport rental. The government also welcomes views from organisations or bodies that represent platforms or businesses in the sharing or gig economy.’
HMRC’s consultation will close on 22nd October 2021. We will obviously keep you up to date with developments as they are announced.