Sellers on eBay, Airbnb, and others in the UK may soon face some interest from the country's tax body, with digital platforms now obliged to report the financial details of some users to His Majesty's Revenue and Customs.
Online selling has become a handy way for people to create supplemental income, and in many cases, the sums are too small to be disclosed to tax officials. However, rule changes have come into force that will make it easier for the UK's His Majesty's Revenue and Customs (HMRC) to know when some people need to start reporting and potentially pay tax.
Under the rules from January 1, reports BBC News, online platforms such as eBay, Airbnb, Vinted, and others where UK-based users sell products and services must start informing HMRC about some user transactions on its services. This covers both online services through websites and transactions performed in apps.
Though HMRC could previously request the information, the rules now mean the apps and services are obligated to make the reports.
The majority of users in the country won't be subject to the rulers, as it will only apply in cases where users have made 30 or more profitable transactions or earned 2,000 euros (1,734 pounds, $2,195). User accounts that don't meet those two criteria won't be reported to HMRC, but details can still be requested.
Users do not have to change what they are doing for the reporting to take place. Companies affected by the rules will be obligated to make their first report to HMRC at the end of January 2025, with the information including the user's tax ID, bank account details, and the value and volume of transactions.
The rules are being implemented as part of an agreement with the Organization for Economic Cooperation and Development (OEDC), in a bid to reduce instances of tax dodging. By being informed of transactions, HMRC will have more of an idea of the side incomes of UK residents, and which do not declare the added revenue.
In the UK, citizens are required to report to HMRC if they earn 1,000 pounds ($1,265) per year in trading income, but while there is a need to inform HMRC, it doesn't mean tax is actually payable on the amount.
"These new rules will support our work to help online sellers get their tax right first time," said an HMRC spokesperson. "They will also help us detect any deliberate non-compliance, ensuring a level playing field for all taxpayers."