Information on sellers will be collected by online marketplaces from 1 January 2024 and the first reports are due by 31 January 2025.

The goods and services covered by the reporting requirement include accommodation, transport rental, personal services, and tangible goods. The information will be sent to the tax authority where the seller is resident. Platforms will also provide a copy of the reported information to the seller.

The government consulted on the adoption of these rules into UK law last year. The consultation document invited views on the optional elements. This included the scope of the rules to be applied to UK sellers, and practical implementation details such as the due diligence processes that platforms would have to undertake and how they would report the required information.

In its response, ICAEW’s Tax Faculty called for an extension to the proposed small platforms exclusion and an exemption from reporting on sellers with only a small amount or value of transactions.

The government has confirmed in its summary of responses that the proposed small platforms exclusion will no longer be included in the rules. This means that all relevant platforms will need to report in relation to UK sellers. Platforms that do not allow sellers to profit from payments received or do not have any reportable sellers will, however, be exempt. An exclusion for ‘occasional’ sellers of goods will also apply where the platform facilitated less than 30 sales and the seller received no more than €2,000 in a reportable period.

In its consultation response, ICAEW highlighted that this and other developments are producing a growing need for a single tax identification number for all UK taxpayers. The government has confirmed that it will not require sellers to provide a Tax Identification Number (TIN) to the platforms they sell through. However, it will engage with businesses in the coming months to discuss how platforms can take appropriate action to collect this information. HMRC will issue guidance on the type of TIN that should be collected, verified, and reported.

The consultation document had raised the possibility of using a Government Verification Service (GVS) as a way of reducing the costs and burdens incurred by platforms in verifying seller data. ICAEW has taken part in discussions on the design of a GVS and looks forward to contributing to the government’s design of such a system.

The government will now be publishing draft regulations for an eight-week consultation, to be finalised in late 2022 or early 2023.