Reporting rules for digital platforms
Published 4 November 2024
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This publication is available at https://www.gov.uk/government/publications/technical-amendments-to-the-reporting-rules-for-digital-platforms/reporting-rules-for-digital-platforms
Who is likely to be affected
This measure affects digital platform operators in the UK that facilitate the provision of services or the sale of goods via their digital platform by sellers resident in the UK or another participating jurisdiction.
This measure also affects UK taxpayers, including individuals and companies, who provide services or sell goods on digital platforms.
General description of the measure
This measure makes amendments to existing regulations to ensure the effect of the policy is as originally intended.
Policy objective
Under the current regulations, UK seller information could be reported to another tax authority when it should have been reported to HMRC. This will result in a delay to HMRC receiving information as it would be received on exchange from another jurisdiction.
Where UK seller information is received from a partner jurisdiction, depending on the content of the relevant treaty, there may be limitations to the way HMRC is allowed to use the data. The amendments will ensure that where there is a UK platform operator, information about sellers resident in the UK must be reported to HMRC.
The current regulations also required platform operators to apply a proportional reduction to seller exclusion thresholds which could bring into scope sellers that do not need to be reported on. Amendment will ensure this does not happen and will prevent unnecessary additional burdens on platform operators.
Background to the measure
In July 2020, the Organisation for Economic Co-operation and Development (OECD) published the ‘Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy’. The UK was involved in the discussions and agreement of these rules at the OECD. The OECD subsequently extended the scope of the rules to include the sale of goods and rental of a means of transport.
At the Spring Budget in 2021, the government announced that the UK would implement the Model Rules for Reporting by Digital Platforms (MRDP). In summer 2021, the UK consulted on the implementation of MRDP.
Draft regulations were published on 18 October 2022 to seek technical feedback to ensure they operated as the government intended and to identify any areas which needed further clarification in more detailed guidance.
The power in section 349 of Finance (No.2) Act 2023 was introduced so that the UK could implement the model rules via secondary legislation, following consultation.
In July 2023, ‘The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023’ (‘the 2023 regulations’) were laid before the House of Commons bringing the reporting rules into effect in the UK.
Detailed proposal
Operative date
The regulations will become operative from November 2024.
Current law
The current law is contained in ‘The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023’.
Proposed revisions
These regulations make amendments to the 2023 regulations.
Regulation 4 of the 2023 regulations allow a platform operator to be exempted from reporting if it has obtained adequate assurances that another platform operator will report the information required to HMRC or to a tax authority in a partner jurisdiction with substantially similar rules.
Amendment to regulation 4 will ensure that where there is a UK platform operator, it must report UK seller information to HMRC.
Regulation 10 of the 2023 regulations requires UK platform operators to apply an apportionment to certain seller exclusion thresholds.
Amendment to regulation 10 of the 2023 regulations means that this requirement will be removed.
Summary of impacts
Exchequer impact (£ million)
| 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 | 2028 to 2029 | 2029 to 2030 |
|---|---|---|---|---|---|
| nil | nil | nil | nil | nil | nil |
This measure is not expected to have an Exchequer impact.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
By removing the requirement for platform operators to apportion seller exclusion thresholds, this measure will reduce impact on sellers by ensuring only those that need to be in scope are reported to HMRC.
The measure is not expected to impact on family formation, stability or breakdown.
Customer experience is expected to stay the same as this measure does not change how individuals interact with HMRC.
Equalities impacts
The measure is not anticipated to have impacts for groups sharing protected characteristics.
Impact on business including civil society organisations
This measure is expected to have a negligible impact on businesses. One-off costs could include familiarisation with the changes and updating processes. Continuing costs for some platform operators could include having to report differently. A continuing saving may be realised by some businesses as they will no longer be required to apply proportional reductions to seller exclusion thresholds.
Platform Operators
This measure will reduce the extent of the reporting exemption for platform operators as in circumstances where there is both a UK platform operator and a foreign platform operator, UK seller data will have to be reported to HMRC by the UK platform operator. The number of platform operators that might be impacted is not known however the circumstances in which this situation arises is expected to be limited.
Business and Individual Sellers
This measure will impact a proportion of individual sellers although it is not possible to determine how many will be impacted. By removing the requirement for platform operators to apportion seller exclusion thresholds, this measure will reduce administrative burdens on platform operators. It will also reduce burden for sellers by ensuring only those that need to be in scope are reported to HMRC.
The measure is expected to have no overall impact on businesses’ experience of dealing with HMRC as some reporting burdens will increase while others will be reduced.
There is expected to be no impact on civil society organisations.
Operational impact (£ million) (HMRC or other)
The 2023 regulations have an estimated cost to HMRC of £36.69 million including 24 Full Time Equivalent (FTE) required.
This measure will not have any significant impact on those costs.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The 2023 regulations will be kept under review and monitored by evaluating information collected from digital platforms.
This measure does not need to be kept under monitoring and evaluation.
Further advice
If you have any questions about this change, please contact the Exchange of Information Policy Team by email: [email protected].
Declaration
James Murray MP, Exchequer Secretary to the Treasury, has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.