Background
The UK has signed up to the Organisation for Economic Development (OECD) model rules for reporting by digital platforms. Under the rules, a digital platform operator must collect and check information from sellers and send an annual report to HMRC. The first report will cover the year to 31 December 2024. It must be submitted to HMRC by 31 January 2025.
Digital platform operators
It is now possible for a digital platform operator to register with HMRC. The platform operator must use the service to tell HMRC if they are either:
- a reporting platform operator and will report; or
- an excluded platform operator and will not report.
This must be done before the 31 January 2025 reporting deadline to avoid a penalty of up to £1,000. Not all platform operators will need to register with HMRC. HMRC’s guidance explains which platform operators should register with HMRC and the circumstances in which a report is required (ie, whether they are a reporting platform operator or an excluded platform operator).
Once registered with HMRC, the platform operator can manage their digital reporting online. This includes submitting a report. Where a report is submitted after the 31 January 2025 deadline, HMRC may charge an initial penalty of up to £5,000 and further penalties of up to £600 per day.
An agent can register for and manage digital reporting on behalf of a platform operator. In doing so, the agent must use the platform operator’s credentials and not their agent credentials.
Sellers on digital platforms
HMRC has published guidance for sellers on digital platforms. This explains why a digital platform operator may ask them for information, and what information may be requested. It also includes guidance on the seller’s own tax position, for example, whether their activities are likely to amount to a trade.
Further information
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