UK - HMRC Published Guidance for Selling Goods or Services on a Digital Platform

UK HM Revenue & Customs (HMRC) has issued important guidelines for sellers selling goods or services in the UK on a digital platform. The guidelines outline the specific information that should be provided to the platform.

The guidelines were published on August 1, 2024, and provide information such as who is considered a seller for this purpose and what information digital platforms should collect and deliver to HMRC.

Key Information from the Guidelines 

Just like the EU with the implementation of DAC7 regulations, the UK has aligned itself with the Model Reporting Rules for Digital Platforms issued by the Organisation for Economic Development (OECD).  It introduced reporting rules for platform operators from January 1, 2024.

Guidelines clarify that individuals and businesses that sell goods and services on digital platforms should provide certain information to platform operators.

Information like first and last name, permanent address, date of birth, Tax identification number, or UK National Insurance number is collected from individuals. For businesses or legal entities, information collected and reported to HMTC is the business name, main address, and tax ID or company registration number for UK companies.

If a Tax ID number is reported for businesses instead of a National Insurance number, it is necessary to include information on which country issued that Tax ID number.

As the guidelines explain, sellers are individuals or businesses that sell goods or services on digital platforms, even when they do not directly offer them. Activities that are subject to the reporting rules are:

• provision of personal services, such as taxi driving, freelancing, or food delivery,

• renting out property or transport,

• selling goods.

Digital platforms should also report the income sellers generate from selling goods and services via the platform. All information for the previous year is submitted annually by the end of January, meaning that the first report should be submitted by January 31, 2025, for the information collected from January 1, 2024, to January 31, 2024.

However, sellers who have fewer than 30 sales of goods and receive less than EUR 2,000, approximately GBP 1,700, for those sales are excluded from the reporting obligation.

Conclusion

These guidelines are a valuable source of information for sellers who sell goods and services through digital platforms and help them comply with reporting obligations. It is important to note that reporting this information does not automatically make sellers liable for paying taxes. This liability is determined by whether sellers are trading and making a capital gain.

Source: HMRC - Selling goods or services on a digital platform