IEIM904450 - Assumed Reporting: Example 2

Consider a platform BCD. It is operated by four Platform Operators (POs), which are resident as follows

  1. PO 1, resident in the UK
  2. PO 2, resident in jurisdiction 2, an EU member state that is a partner jurisdiction of the UK
  3. PO 3, resident in jurisdiction 3, an EU member state that is not a partner jurisdiction of the UK
  4. PO 4, resident in jurisdiction 4, a non-EU member state that is a partner jurisdiction of the UK

BCD has sellers registered who are resident in each of the four jurisdictions where it operates. Each of the four POs contracts with sellers who are resident in all four jurisdictions, not just the jurisdiction where the PO is resident.

Only PO 1 which is resident in the UK will have an obligation to report information to HMRC. POs 2, 3 and 4 in the other jurisdictions are not required to report to HMRC. They will need to comply with reporting obligations in their respective jurisdictions. HMRC cannot advise on these obligations and the POs will need to check the obligations in their jurisdictions.

As PO 1 has sellers who are resident in 2 EU member states, it was obliged to report data for 2023 under the EU directive known as DAC 7. It registered with the tax authority in jurisdiction 3, and reported information there on sellers resident in jurisdiction 2 and 3.

Now that the UK rules are in force, PO 1 has an obligation to report to HMRC on sellers resident in jurisdictions 1, 2 and 4 (the UK and its two partner jurisdictions). It cannot report information to HMRC on sellers resident in jurisdiction 3 as jurisdiction 3 is not a partner jurisdiction of the UK. If under DAC 7 it still needs to report information on sellers resident in jurisdiction 3, it should continue to report that information to the tax authorities in jurisdiction 3 as it did for the 2023 data.

PO1 must report information on sellers who are resident in the UK to HMRC. PO1 cannot rely on the POs in jurisdictions 2 and 4 to report information on PO1’s UK sellers to their respective tax authorities for those tax authorities to exchange to then exchange the information with HMRC.

PO1 must also report information to HMRC on sellers resident in jurisdictions 2 and 4, unless they rely on one or both of the other POs resident in jurisdictions 2 and 4 to report the information to their respective tax authorities. This must be agreed between the POs as explained at IEIM 904410, and PO1 in the UK will need to inform HMRC of this. PO1 cannot rely on PO3 to report information on sellers resident in jurisdictions 2 and 4 to the tax authorities in jurisdiction 3, because jurisdiction 3 is not a partner jurisdiction of the UK, and so the exemption from reporting in the UK’s regulations would not apply to PO1.

PO1 may assume the reporting obligations of PO2 and PO4 in relation to sellers resident in the UK and jurisdictions 2 and 4. This should be appropriately agreed and documented by the POs. If PO1 reports information on behalf of PO2 and PO4 to HMRC, HMRC will then exchange the information on sellers resident in jurisdictions 2 and 4, with the tax authorities in those jurisdictions as appropriate. PO2 and PO4 should still check to ensure they meet the requirements for any exemption from reporting in their respective jurisdictions to ensure they fully comply with their obligations. PO1 cannot assume reporting for sellers resident in jurisdiction 3 as it is not a partner jurisdiction.