Sign up for tax alert emails    GTNU homepage    Tax newsroom    Email document    Print document    Download document

May 24, 2022
2022-5505

UK delays reporting rules for digital platforms

The United Kingdom (UK) Tax Authority, Her Majesty’s Revenue and Customs (HMRC) has issued an Update on the UK’s reporting rules for digital platforms.

Following a recent consultation on the implementation of the OECD’s Model ‘Reporting rules for digital platforms’, the UK Government has decided that the new rules will start from 1 January 2024. This new date is intended to give platforms and their advisors time to prepare for the implementation of the new rules, with collection of information starting from 1 January 2024 and submission of the first reports due by the end of January 2025.

Further, HMRC has said that it is currently considering the many comments and issues that have been raised by the consultation respondents. HMRC is aiming to publish the Government’s response to the consultation, draft regulations giving details of the new rules, and an update on interactions with European Union (EU) rules in this area (referred to as DAC71) this summer. HMRC has said that it will also be engaging with platforms and their advisors before the new rules come into effect.

Background

New rules being introduced in the EU and the UK will require digital platforms to report income earned by sellers using their systems to the respective tax authorities. Enhanced platform reporting is also being introduced in the United States from 2022 (1099-K).

The EU/UK rules will impact:

  • Digital platforms that allow sellers to:
    • Rent immovable property (e.g., short-term accommodation)
    • Provide personal services (e.g., on-demand household/professional services)
    • Rent transport
    • Sell goods
  • Sellers who utilize platforms to provide in-scope activities.

Implications

While the announcement that the UK reporting is delayed may be generally welcomed by platforms as an opportunity to have more time to adapt to new rules, the deferral may not be beneficial to all platforms based in the UK. Platforms that deal with sellers in the EU will now be required to report in an EU country in 2024 rather than reporting in the UK, as a result of extraterritorial provisions in DAC7.

_________________________________________

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United Kingdom), London

_________________________________________

Endnotes

  1. The EU's Directive on Administrative Cooperation (DAC) in the field of taxation (2011/16/EU)
 
 

The information contained herein is general in nature and is not intended, and should not be construed, as legal, accounting or tax advice or opinion provided by Ernst & Young LLP to the reader. The reader also is cautioned that this material may not be applicable to, or suitable for, the reader's specific circumstances or needs, and may require consideration of non-tax and other tax factors if any action is to be contemplated. The reader should contact his or her Ernst & Young LLP or other tax professional prior to taking any action based upon this information. Ernst & Young LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect the information contained herein.

 

Copyright © 2024, Ernst & Young LLP.

 

All rights reserved. No part of this document may be reproduced, retransmitted or otherwise redistributed in any form or by any means, electronic or mechanical, including by photocopying, facsimile transmission, recording, rekeying, or using any information storage and retrieval system, without written permission from Ernst & Young LLP.

 

Any U.S. tax advice contained herein was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.

 

"EY" refers to the global organisation, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

 

Privacy  |  Cookies  |  BCR  |  Legal  |  Global Code of Conduct Opt out of all email from EY Global Limited.

 


Cookie Settings

This site uses cookies to provide you with a personalized browsing experience and allows us to understand more about you. More information on the cookies we use can be found here. By clicking 'Yes, I accept' you agree and consent to our use of cookies. More information on what these cookies are and how we use them, including how you can manage them, is outlined in our Privacy Notice. Please note that your decision to decline the use of cookies is limited to this site only, and not in relation to other EY sites or ey.com. Please refer to the privacy notice/policy on these sites for more information.


Yes, I accept         Find out more