The Financial Times has reported that online marketplaces such as Amazon, Airbnb, Deliveroo, eBay and Uber will be required to report the income made by sellers on their websites and apps to HMRC from January 2023, in a move affecting gig workers, freelancers and self-employed people.
This move forms part of the government’s implementation of an Organisation for Economic Co-operation and Development (OECD) policy as part of an international standard to improve tax compliance.
The new rules would require platforms to:
- Collect sellers details including their identity, location, and how much they have earned via the platform;
- Verify the seller’s information to ensure it is accurate;
- Report the information, including the seller’s income, to the tax authority annually by 31 January;
- Give that information to the sellers, so that they can use it to help them complete their tax returns.
The government has adopted the OECD’s approach of defining “occasional sellers” as those who make fewer than 30 sales of goods a year of “a total of not more than €2,000” who are likely to be exempt.
HMRC is consulting on the detail of the proposal, and the deadline to respond is 22 October 2021.
According to the consultation, the change will allow HMRC to have access to data from platforms based outside the UK quickly and efficiently, which should encourage compliance and increase the visibility of transactions.
The new rules are set to come into force in just 16 months (from January 2023), and by the time the detail is confirmed post-consultation there won’t be long for people to prepare for the change.
It is a large scale change that is expected to impact up to 5m UK businesses, as well as many millions of people who trade online or provide services via platforms. This will clearly require significant communications by the government to ensure that everyone affected is aware of the change, and particularly any tax implications for their circumstances.