If you sell goods or services online, the way HMRC collects information has changed. As of 1 January 2024, digital platforms are now required to share seller data directly with tax authorities to increase transparency across the platform economy.
Crucially, the tax rules themselves haven't changed, but HMRC’s visibility has. Here is a concise overview of the new reporting requirements and how they might affect you.
1. Introduction of a new annual process to:
Collect seller information
Verify seller information
Report on seller information to HMRC
Reporting must be completed by 31 January following the end of each calendar year.
This requirement forms part of broader changes introduced under OECD guidelines, designed to enhance transparency in the reporting of income earned through the platform economy.
2. Who needs to be reported?
You may fall within the reporting rules if you sell goods and meet either of the following:
30 or more sales in a calendar year
Around £1,700 (or equivalent) earned from those sales
Important to know:
These are reporting triggers, not tax thresholds
Meeting them does not automatically mean you owe tax
Platforms send your information directly to HMRC, so they receive a copy of what’s reported
3. Information Reported
The following information is reported:
Personal identification details (e.g. name, National Insurance number, etc.)
Income and transaction activity from the platform to HMRC
Calendar-year totals, including amounts reported net of applicable platform fees or commissions
4. How HMRC uses the data
HMRC can now cross-check the information submitted by platforms against other records they hold. This helps them identify any gaps or inconsistencies. They may compare:
Whether you are registered for Self-Assessment
Income you have declared versus income you may not have declared
Information from other third-party data sources
This increased visibility allows HMRC to build a clearer picture of your overall income and ensure everything is reported correctly.
5. Levels of risk
Your level of risk depends on the nature and frequency of your selling activity:
Low risk: Selling personal items occasionally. This is unlikely to result in any tax being due.
Medium risk: Selling regularly. HMRC may question whether your activity amounts to trading rather than casual selling.
High risk: Buying items to resell or making goods with the intention of selling at a profit. This is considered trading, and any profits should be declared.
Key Action Points
Reconcile your records Align your platform reports with the UK tax year when calculating your tax position. Tip: Download the platform’s annual statement and prepare a simple summary of income and expenses by tax year.
Assess your activity Determine whether your selling activity qualifies as trading. If it does, it should be declared to HMRC.
Check the £1,000 trading allowance If your total income exceeds £1,000 in a tax year, you may need to report it through Self-Assessment.
Review past activity Identify and address any historic non-compliance before HMRC raises any queries.
The most important thing to remember is that these rules are about transparency, not a new tax. HMRC is simply digitising the way they verify income in a modern economy.
If you’re a casual seller, you can likely continue as usual. However, if your activity is regular and crosses the reporting triggers, the best way to protect yourself is through clear record-keeping. By reconciling your sales now and understanding your "trading" status, you can ensure that when HMRC receives your data, your own tax filings are already one step ahead.
📞 If you're looking for tax advice or assistance in making a disclosure, please use the form on the bottom of this page to get in touch with us!