The UK HMRC published a guidance on Reporting rules for digital platforms on the UK’s implementation of the OECD’s Model Rules for Platform Reporting, on 1 August 2024, outlining the reporting requirements for individuals selling goods or services on a digital platform.

Starting 1 January 2024, UK digital platforms must collect and report annually on the income of sellers who provide personal services, sell goods, or rent property and transport through their platforms.

The first data reports are due in January 2025.

If anyone manages or works within a digital platform in the UK, they may need to:

  • Collect and check information about sellers on the platform;
  • Report details about sellers to HMRC;

If they need to report to HMRC, they will need to use the digital platform reporting service.

What qualifies as a digital platform

An app or website is a platform if both these apply:

  • It connects sellers to customers to supply goods or services;
  • One can find out the amount paid to sellers for goods or services.

Examples of services include:

  • Taxi and private hire;
  • Food delivery;
  • Finding freelance work;
  • Letting short-term accommodation.

These rules do not apply if one only:

  • Sell on a platform;
  • Manage a platform as a sole trader;
  • Sell goods or services directly through their own website or app

Who needs to report

A person needs to report information to HMRC if they are a reporting platform operator. This includes any platform operator, except an excluded operator, where one of the following applies:

  • They reside in the UK;
  • They are managed under UK laws;
  • They have a place of management in the UK.

An excluded platform operator is one whose entire business model either:

  • Does not allow sellers to profit from received payments;
  • Has no reportable sellers.

One needs to use the digital platform reporting service to tell HMRC if they are:

  • A reporting platform operator;
  • An excluded platform operator.

Who needs reporting

A person needs to report on reportable sellers. These are sellers that both:

  • Live in the UK or another country following the rules;
  • Actively supply or are paid for goods or services on the platform;

They do not need to report on certain categories of low-risk sellers if they are:

  • Entity sellers (like a company) with more than 2,000 property rentals per year on the platform;
  • Government entity sellers;
  • entity sellers, or related to entities whose shares are traded regularly on a stock exchange;
  • Sellers making fewer than 30 sales of goods and receiving less than EUR 2,000 for those sales in a year.

What needs to be collected

As a reporting platform operator, one will need to:

  • Collect information about sellers on your platform;
  • Collect information about any property listed on your platform (if applicable);
  • Verify the information collected;
  • Identify reportable sellers.

For individual sellers, one needs to report their:

  • Full name;
  • Main address;
  • Date of birth;
  • Tax identification number/national insurance number.

For entity sellers, they will need their:

  • Legal business name;
  • Main business address;
  • Tax identification number (company registration number for a UK company)

If the seller is a UK partner, their partnership Unique Taxpayer Reference (UTR) — a reference number from HMRC is required.

Due diligence

Due diligence for active sellers only

One can choose to carry out due diligence on active sellers only. Active sellers are those that supply or are paid for goods or services. They will need to report the HMRC using the online reporting service if you want to do this.

Extended time limits for due diligence on existing sellers

When anyone first becomes a reporting platform operator, they have until the end of the second year to complete due diligence for pre-existing sellers. These sellers must have been registered on a platform before they can start reporting. This gives an extra year to collect and verify information for pre-existing sellers.

When to report

The report to HMRC must be submitted by 31 January for the previous reporting year. For example, you need to collect information for the year 1 January 2024 to 31 December 2024 and report it by 31 January 2025. You also need to give a copy of any reported information to the seller by this deadline. This will help them if they have to fill in a tax return.

What to report

The following documents needs to be submitted:

  • Any other tax identification number (like a VAT number) and where it was issued;
  • The country the seller lives in;
  • The total amount paid to the seller for the reporting year;
  • The number of transactions the seller received payment for;
  • Any fees, commissions, or taxes you have withheld or charged;
  • Bank account details to which amounts were paid.

How to submit a report

Taxpayers need to register to use the online service to submit a report. After registration, they will need to upload an XML file to the service to report seller information.

Penalties

Non-compliance will result in penalties, which are as follows:

  • A penalty of up to GBP 1,000 for not telling HMRC if a reporting platform operator or excluded platform operator
  • An initial penalty of up to GBP 5,000 and a continuing penalty of up to GBP 600 per day for not reporting by the 31 January yearly reporting deadline;
  • A penalty of up to GBP 100 for each inaccurate, incomplete, or unverified seller’s record;
  • Limiting access until the required information is collected;
  • Preventing sellers registering on the platform.