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Digital platform reporting rules to start January 2024

New reporting rules for digital platforms will be implemented from 1 January 2024, said the HMRC.

Digital platform reporting rules to start January 2024
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The decision follows the consultation on the implementation of the OECD’s Model “Reporting rules for digital platforms” and will give platforms and their advisors time to prepare for the implementation of the new rules, with collection of information starting from January 2024 and submission of the first reports due by the end of January 2025.

HMRC is considering the many comments and issues that have been raised by consultation respondents. It is aiming to publish the government’s response to the consultation, draft regulations giving details of the new rules, and an update on interactions with EU rules, at the next legislation day in the summer.

HMRC will also be engaging with platforms and their advisers before the new rules come into effect to make sure they are implemented proportionately and effectively.

In line with the 27 EU nations, HMRC will now require digital platforms to report on how much their users have earned through the platform each year. They will also be required to collect additional details about their users to accurately identify who the user is and where they are based. Some of the mandatory information is likely to require the remediation of existing user accounts and changes to future onboarding processes.

The OECD’s model rules involve:

  • Annual reporting by platform operators of the identity, location and calendar year income of their business sellers by 31 January following the year, for sharing with the tax authority in their own jurisdiction of residence (HMRC for UK operators) and their sellers, to help sellers declare the correct amounts for tax purposes
  • Tax authorities exchanging this information, as appropriate, with tax authorities in the sellers’ jurisdiction of residence and, where the income relates to rental property, the location of that property

This means that, from January 2024, UK-based digital platform providers will be required to report information to HMRC about the income of workers and sellers based anywhere in the world that are using their platforms, with the aim of enabling HMRC and other tax authorities to detect and tackle tax compliance failures.

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