From 1 January 2024, online sales platforms must report seller earnings to HMRC.
The tax rules haven’t changed for individuals who sell goods or services online; but these changes mean HMRC will be provided with information from online platforms.
Any trading on internationally-based sites will also be reported to HMRC.
INFORMATION WHICH WILL BE PASSED TO HMRC
HMRC already had the power to ask platforms for information. From 1 January 2024, however, the platforms will have to submit an annual report. The first reports are due at HMRC by 31 January 2025 with a quarterly breakdown
Specifically new rules in the HMRC internal manual are
“The format of the statement to Sellers is not prescribed, but it should include the Seller’s identification details, Consideration received, broken down on a quarterly basis, details of the of Relevant Activities performed and any fees, taxes or commissions withheld.”
Its hard to know at this stage how on line platform will decide on the description of “relevant activities” ie what is it that you do that generates income Its all new as its a little vague unfortunately.
In my view, based seeing reports provided to HMRC, I would suggest that they the following are likely to be sent to HMRC : full name, legal address, date of birth, when the account was opened ,where money is paid out to, ie bank account or prepaid card and if they have the information possibly your National Insurance numbers and/or taxpayer identification numbers, as well as your earnings and the fees that you’ve paid.
ACTIVITIES AFFECTED INCLUDE SELLING:
- Products you’ve made (eg via Etsy)
- Goods you have bought and are selling on (eg via Vinted or eBay)
- Services such as taxi driving, food delivery, childcare, plumbing , Only Fans etc
- Renting out parts or all of your property (eg on Airbnb) or a vehicle
ARE THERE ANY EXEMPTIONS?
If you have fewer than 30 sales or they generate less than approximately £1700 (€2000) in a year you will not be included in a report (but you may still need to include details on a tax return if other criteria are met).
WHAT TO DO NEXT
We can help you with making a voluntary disclosure to HMRC and helping you bring your tax affairs up to date with less penalties and less invasive questioning that would result from an HMRC enquiry see my blog here on this process
Contact me here for more information
