If so, HMRC’s latest guidance details the additional reporting requirements that digital platforms must adhere to. This will be important to understand if you are a seller on a digital platform as it is your information that will be being reported to HMRC.
What counts as a digital platform
HMRC says an app or website will fall into this category if it connects sellers to customers to supply goods or services. Some examples of sites that we have seen cases of (and expect to see more) are eBay, Vinted, Airbnb and Deliveroo, but there are many more platforms out there!
In addition, the platform must hold or be able to easily calculate the amount paid to sellers (even if that is via a third party).
Platforms need to register as a digital platform with HMRC if they reside in the UK, their business is managed in the UK or their business is incorporated under UK law. They will need to register as a reporting platform even if they don’t have any sellers who need to be reported (this is referred to as an excluded platform)
Who will be reported?
Digital platforms need to report sellers who supply or are paid for goods or services and either live in the UK or manage property rentals in the UK.
Sellers who make less than £1,700 for fewer than 30 sales in a year do not need to be reported to HMRC. This is because they are unlikely to be considered trading (see our previous blog on what HMRC looks at when considering trading status) and their sales might not be taxable income, although we would always recommend checking this with your adviser.
What information will be collected?
For individual sellers, HMRC requires reports on the following:
- Full name
- Home address
- Date of birth
- National insurance number (or tax identification number if they don’t live in the UK)
- Rental property address (if applicable)
For partnerships, trusts, charities or companies, HMRC require reports on:
- Legal business name
- Main business address
- Company registration number (or tax identification number if not a UK company)
- Partnership Unique Taxpayer Reference (if applicable)
Selling information that will be reported:
- Other tax identification numbers (for example a VAT number)
- Total amount paid to the seller for each quarter net of the platform’s deductions
- The number of transactions that the seller received payment for
- Bank details for the account that the amounts were paid to
Reports will be made for the period 1 January to 31 December and must be submitted by 31 January following the reporting period – giving platforms only 31 days to compile and submit their reports. Platforms may be charged a penalty for late reporting or if the report does not pass HMRC’s checks. HMRC have provided specific guidance on how the report must be presented and submitted to them here:
