HMRC gain new powers to automatically gather data from digital sales platforms

From 1 January 2024, online sales platforms such as Etsy, Vinted or eBay must pass on sales volumes for each seller to HMRC.  Previously HMRC had to make a specific request to each platform for a named person or business.  These rules don’t only apply to UK platforms as most other large trading nations have an agreement with HMRC that the rules apply to UK traders selling via overseas platforms also.  

It is not clear but it appears that data will flow at the end of 2024 for the calendar year in arrears.  HMRC, depending upon their resources, could identify online sellers who should, but have not registered for self-employment or VAT. Individuals earning more than £1,000 in a tax year, in addition to their usual source of income, e.g. from employment, will need to register as self-employed and report this ‘trading’ income to HMRC via a self-assessment tax return.

The new powers also give HMRC, in theory, more ability to spot discrepancies between the information that is provided by the digital platform and that by the individual, and this could lead to tax enquiries should they have reasonable grounds, giving them grounds to launch an investigation.

For futher information, please contact one of our Indirect Tax Services team members.