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New Rules Could Force Tech Giants to Report Incomes of Sellers Using Their Sites

New Rules Could Force Tech Giants to Report Incomes of Sellers Using Their Sites

The UK government is considering plans to oblige tech giants to inform HMRC of the incomes being generated by service providers operating on their platforms.

The rules could potentially come into effect from January 2023, with gig workers, landlords and freelance service providers set to be among those most impacted.

According to HMRC, there could be anywhere between two and five million businesses in the UK affected by the rules, which will be aimed initially at the likes of Amazon, Uber, Airbnb, Deliveroo and eBay.

A government consultation on the associated issues is underway and focussed in part on the potential workability of rules that demand detailed information from leading tech companies, with early 2023 proposed as a possible implementation date.

The goal is ultimately to give HMRC a greater degree of visibility on how much money is being made by businesses and individuals that provide services via well-known websites or mobile phone apps.

Treasury minister Jesse Norman wrote in the foreword to the consultation on the subject: “The new rules will improve international co-operation on the exchange of information for tax purposes.

“They will allow HMRC to have access to data from platforms based outside the UK quickly and efficiently, which should encourage compliance and increase the visibility of transactions.”

Mr Norman also wrote that he expects the new rules to help taxpayers get their tax returns right and to support HMRC in detecting and tackling instances of non-compliance with fundamental tax laws.

It has been explained that the companies likely to be the focus of any new rules in these contexts will include those whose technology enables the provision of food deliveries, freelance work, accommodation lettings and taxi services.

In addition to recording and reporting the sales being made via their websites, companies are expected to be asked to provide HMRC with information that helps identify individual sellers and indicate where they operate from. 

Anita Monteith from the Institute of Chartered Accounts has told the Financial Times that the changes to tax rules being explored currently could have an impact on “a lot of ordinary people”.

Ms Monteith suggests that the new laws could also see more people needing to consult with tax advisers to make sure they take the right steps to remain compliant and aware of any tax reliefs they might be entitled to.

David Tattersall
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