News

Up to 31 December 2023 HMRC could request information from UK-based online operators as to the trading of their members. 

As of 01 January 2024 the information provision for online trading has changed. The online operators are now obliged to collect and provide details of transactions to HMRC. Online platforms, such as Uber, Vinted, Airbnb, eBay etc. will be affected.

The new rules are being implemented as the UK has joined the Organisation for Economic Cooperation and Development (OECD). The OECD is an international body and information will be shared between the member countries. The intention is that there will be a global attempt to reduce tax evasion and treat sellers on digital platforms as traditional businesses for tax purposes.

What are the new rules?

Digital platforms are now required to report the income sellers are getting through their site and details of who those sellers are.

The rules will apply to:

1. Sales of goods including items such as:

• Hand crafted items

• Second hand clothes

• New clothes

• Household items

2. Provision of Services such as:

• Food delivery

• Taxi hire

• Short term lets

• Letting of a driveway for parking

The information provided by the online firms will include:

• Tax Identification such as UTR

• Bank account details

• Value of transactions

• Volume of transactions

 

Information does not have to be provided for sellers making fewer than 30 transactions in a year or receiving less than £1,735 income per annum.

The new obligations are in place from 01 January 2024. The digital platforms will be required to report information to HMRC by the end of January 2025.

If you are already declaring and paying the relevant tax on all income you do not need to do anything.

Where your total income, before the deduction of expenses, is less than £1,000 you may not need to declare the income for UK tax purposes. The £1,000 is a trading allowance which applies to property income and trading income. Please contact us for more information on the Trading Allowance.

If you believe your income is above the Trading Allowance or are unsure whether you should declare to HMRC you should consider contacting HMRC. We would be happy to advise if you need help on deciding if you should declare.

If you believe you should declare your income to HMRC you should do so as soon as possible. A voluntary disclosure should incur lower penalties than if HMRC instigate an investigation.

You should keep records of all transactions including expenses even if you do not need to declare the income to HMRC.

If you would like to discuss any of the issues noted above please contact us on:

01244 625 500 or 01978 364 000

contactus@foremansllp.com