Looking at the gig picture

As part of the Budget 2021, the former Chancellor, Rishi Sunak, announced that the government would consult on the implementation of the Organisation for Economic Co-operation and Development (“OECD”) rules, that will require UK digital platform operators, (such as JustEat, Deliveroo, Uber, Amazon and eBay) to collect, verify, and send, certain information about the income of their sellers of goods and services, to both HMRC and the seller themselves.  The introduction of the rules would help to aid HMRC detect and tackle non-compliance and to ensure that those in the ‘sharing’ and ‘gig’ economy “get their tax right”.  To explain,  the gig economy is usually associated with an individual providing themselves for a temporary position, whereas the sharing economy is the sharing of resources, i.e., renting or borrowing goods and on occasion the sale of possessions or assets (a typical example, is that of individuals using the Airbnb software platform to rent their home).

Following the initial consultation, the government confirmed that the rules would be introduced and issued draft regulations (the ‘’Regulations’’) on 18th October 2022 for technical comment until 13th December 2022.

We have set out the key points as follows:

When will the Regulations apply?

The intended date for the Regulations to come into force is 1st January 2024, and the first reports under the Regulations will be due by 31st January 2025.

The draft regulations are expected to be finalised sometime during the early part of this year.

Who do the rules apply to?

The new Regulations would apply to platforms facilitating the provision of the sales of goods and/or services who are resident in the United Kingdom or a “Partner Jurisdiction”.  The term “Partner Jurisdiction” has not yet been defined; however, we would expect this to include the EU under DAC7 which is a regime largely based around the OECD’s rules requiring administrative co-operation in taxation throughout EU member states. It is possible that some UK platforms may be caught under both the DAC7 regime and the UK rules.  However, the rules would avoid duplication and allow the platform operator to submit their reports only once to HMRC. During the consultation process the United Kingdom agreed to minimise duplications relating to the reports by engaging with the EU to set up a consistent method.

All platforms within the scope of the rules must comply with the Regulations, except for the following:

  • those platforms whose entire business model is such that it does not allow sellers from making a profit; or
  • whose entire business model is such that it does not have “reportable sellers”.

Initially, an exclusion was proposed for those platforms considered to be “small” (i.e., making under 1 million Euros), however, due to the administrative struggles to determine whether or not a platform would be considered small, this proposal was not included in the Regulations.

Further, the Regulations provide an exemption to reporting platforms in instances where the platform operator “reasonably believes” that another platform operator is required to, and will, report information it would have otherwise reported to HMRC with regard to that seller.

Importantly, where a platform operator falls under one of the exemption provisions outlined above, the onus is on the platform operator to notify HMRC that it falls under one of the listed exemptions.

What records does a platform operator need to keep in order to comply with the Regulations?

The Regulations make clear that a platform operator who falls within the rules must establish and maintain procedures that are designed to:

  • collect information about sellers;
  • collect, where applicable, information about property listings;
  • verify that information; and
  • identify reportable sellers in respect of each reportable period.

Records must be kept for a period of 5 years, which includes information that may have been collected during the platform operator’s due diligence process.

Each report submission must be made electronically using an electronic reporting system, which will need to be provided in a form and manner that meet HMRC requirements.  Where reports have not been submitted in the prescribed format, the submission will be treated as not having been made.  Currently, there has been no detail provided as to what this would entail, and so, we continue to wait for clarification as to the acceptable format and how the system will work in practice.

What are the penalties if a platform fails to comply with the Regulations?

Platforms must ensure that their sellers provide the company with accurate information. Failure to comply with this request would mean a platform would receive a penalty of up to £100 for each inaccurate, incomplete, or unverified seller record that had been submitted to HMRC. This penalty regime also extends to instances where the platform fails to maintain a record of its process(es) for the purposes of a due diligence check.

In addition, where a platform operator fails to provide information to HMRC by the proposed reporting deadline of 31st January following the end of the reportable period, then the platform will be liable to a penalty of up to £5,000. Where the failure continues, there is the possibility of further penalties of up to £600 for each subsequent day. Similar provisions have been outlined in the Regulations relating to the penalties for late reports.

Penalties will also be incurred if the platform operator fails to notify the revenue that it is a reporting operator, or conversely, fails to notify HMRC that it relies on the exemptions outlined above – the liability in this instance would be a penalty not exceeding £1,000.

It is likely that the maximum penalties will be reduced for a number of mitigating factors, including where the platform operator has a reasonable excuse as to why it did not meet its obligations under the Regulations. The Regulations, however, do make clear that the insufficiency of funds to do something or that a person relying on another to do something will not amount to a reasonable excuse.


With many more businesses in various different sectors moving towards an app-based operation (including in the recruitment sector), these Regulations are likely to shake up the industry. Many who may fall under scope of the rules expressed concern during the consultation process that they would incur significant costs to adhere with the proposed rules with substantial outlay required on such things as  training staff, updating contractual terms and policies, ensuring that any software provider is compliant with the Regulations and can submit the requested data to HMRC in their prescribed format, as well as having the capability to produce reports to sellers.

To add to this, platform operators will need to ensure it has robust methods in place to collect the data requested by HMRC, which may prove to be difficult given that the seller has no obligation to provide the platform with its own personal data (e.g., a Tax Identification Number (“TIN”)).  Although there is an obligation on the platform operator to ‘’provide” information they have reported under the rules to the seller, there is currently insufficient detail in the Regulations as to what this would mean – i.e., could the platform operator provide the information in an electronic format, or will a hard copy of the report be sufficient for the purposes of complying with the Regulations?

We will continue to monitor the situation and as always, we will keep you abreast of any developments.

In the meantime, if you have any questions or queries on the platform reporting requirements or in relation to platforms generally, please contact a member of the Chartergates team.

Published: 02.15.23 - Posted In: Latest News