Budget representation 2024

Millions of people work in the gig economy, for example delivering food. They may be young, migrant and have little experience of the tax system. They are probably unable to afford professional tax advice or assistance. As a matter of economic reality, they may face real difficulties in understanding and dealing with their taxes.

An opportunity for the government to intervene to raise sellers’ awareness of their tax obligations, and support them to fill in their tax returns correctly is coming up. From January 2025, online platforms should send both HMRC - and importantly - sellers, information about the amount of income earned on the platform in the preceding calendar year. The policy intention is to help taxpayers to get their taxes right first time. However the current ‘seller information’ requirements on online platforms are minimal.

In our budget representation, we recommend that the Government amend the regulations implementing the OECD’s Model Reporting Rules for Digital Platforms to make the ‘seller information’ requirement more prescriptive so that what is provided is easily understandable and consistent. An HMRC template would help achieve this and we have included an illustration of how this could look.

Without this, there is a risk that what will be provided will be indigestible, which will result in the information being confusing or even unread/unactioned. This has real implications for the small business tax gap but also HMRC in terms of 1) likely increased contact from confused sellers at a time when they are at their busiest with the self-assessment deadlines; 2) future compliance work, to the extent that the information is used and applied incorrectly by sellers meaning their tax returns are inaccurate.