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  • Tag Archive: HMRC guidance

    1. HMRC’s Guidance on Reporting Rules for Digital Platforms in the UK

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      HMRC guidance on digital platform reporting – Introduction

      On 15 November 2023, HM Revenue & Customs (HMRC) issued comprehensive guidance on the UK implementation of the OECD’s model reporting rules for digital platforms.

      This initiative aligns with similar regulations already in effect in EU Member States.

      The new rules are applicable from 1 January 2024, with reporting starting in January 2025.

      Key Aspects of the Guidance

      Scope and Obligations of Platforms

      The rules apply to UK digital platforms facilitating transactions between sellers and customers.

      These platforms, defined broadly, are required to perform due diligence to identify sellers engaged in relevant activities.

      Reporting obligations include annual submission of identification and transactional information of sellers to HMRC.

      Difference from EU Rules (DAC7)

      UK-based platforms under EU rules must be aware of earlier reporting obligations in the EU.

      However, platforms complying with UK rules may not need to report in the EU, as there’s relief when equivalent information is accessible from non-EU countries.

      Platform Definitions and Operator Responsibilities

      The guidance clarifies what constitutes a ‘Platform’ and outlines the responsibilities of ‘Platform Operators,’ especially in scenarios with multiple entities involved in a single platform operation.

      UK Reporting Platform Operators

      Notably, non-UK platforms with UK sellers or property are not deemed in-scope as UK Reporting Platform Operators.

      However, platforms operated by partnerships or similar legal entities must consider their UK tax exposure.

      Relevant Activities and Personal Services

      The guidance details activities considered relevant under the rules, emphasizing that services must be ‘at the request of the user’ and capable of being personalized.

      Seller Identification

      For reporting purposes, the ‘Seller’ is identified as the person registered on the Platform, which simplifies reporting obligations for Platform Operators.

      Due Diligence and Verification

      Platform Operators are mandated to conduct due diligence on sellers, with the flexibility to delegate this task but retaining legal responsibility.

      Online Reporting Portal

      HMRC has established the Platform Reporting Service (PRS) for the electronic submission of reports, requiring registration and notification by Platform Operators.

      Notable Deadlines and Next Steps

      Platform Operators must begin due diligence and related obligations from January 1, 2024.

      The first reporting period covers January 1 to December 31, 2024, with reports due by January 31, 2025.

      HMRC guidance on digital platform reporting – Conclusion

      HMRC’s new guidance provides a clear roadmap for digital platforms to prepare for and comply with the upcoming reporting requirements.

      It emphasises the importance of accurate data collection and reporting, aiming to streamline the process and ensure tax compliance across digital platforms.

      For UK digital platforms, and those with UK sellers, understanding and integrating these guidelines into their operational frameworks is essential for smooth compliance starting in 2024.


      Final thoughts

      If you have any queries about this article on HMRC guidance on digital platform reporting, or UK tax matters in general, then please get in touch.