Starting in January 2024, significant changes are coming to popular digital platforms like eBay, Vinted, Etsy, and Airbnb. These platforms will now be obligated to gather seller data and share it with HMRC. Simon Pinion, Business Advisory Partner explores the changes below and what it means for you.
Are you currently engaged in selling items on these digital platforms?
If you’re among the countless individuals who use platforms such as eBay, Vinted, Airbnb, or Etsy to conduct your business, it’s crucial to be aware of the impending requirements.
Starting from January 1, 2024, these platforms will be mandated to collect seller data in accordance with OECD regulations. HMRC will then utilise this data to cross-reference it with their records to ensure accurate income reporting. They will also be on the lookout for any suspicious patterns that may indicate unreported business activity.
It’s important to note that these platforms will not be required to submit their reports until 31 January 2025. However, failure to comply with these regulations, or providing inaccurate, incomplete, or unverified seller records, may result in fines and penalties for the platform itself.
Now, if you consider yourself an ‘occasional’ seller who uses these platforms to sell items from time to time, there is a provision that may apply to you. The ‘occasional’ seller exclusion applies if the platform facilitated fewer than 30 sales, and the seller received no more than €2,000 (approximately £1,700) in a reportable period. Additionally, platforms will furnish sellers with a copy of the reported information, offering some peace of mind that you’ll be notified if your data is being shared.
Furthermore, each individual is entitled to a £1,000 trading allowance per tax year, which can be offset against the turnover generated from these activities, or you can opt to deduct actual expenses. If your sales exceed £1,000 in a tax year, it may be necessary to report them to HMRC.
It’s crucial for both regular and occasional sellers on digital platforms to be aware of these upcoming changes, as they can have significant implications for your tax obligations and potential penalties for non-compliance.