HMRC have published a call for evidence, ‘The role of platforms in ensuring tax compliance by their users’, which seeks information on how online platforms could be used to help users deal with their tax obligations.
- Research suggests some who provide goods or services through online platforms do not fully understand their tax obligations.
- Many have never made money outside of an employee/employer relationship.
- Many will not have experience of reporting income directly to HMRC.
- HMRC are already taking measures to combat VAT fraud in Online marketplaces.
- They want to explore how they can use platforms to assist in tax administration in the same way that other intermediaries assist, such as employers.
- The call for evidence looks to help HMRC understand how platforms interact with the users, what they know about the users and what the attitude to tax is of the users.
- The call for evidence considers what action has been taken in other countries:
- In France, platform providers must provide users with a description of their obligations in relation to each transaction.
- In Estonia, users can opt into having data sent to the tax authorities to allow pre-population of returns.
- In Belgium, there is a new tax rate for those providing online services through platforms. The platforms withhold 10% of gross payments.
The call for evidence can be read in full here. The closing date for comments is 8 June 2018.
Summary of questions
Question 1: What helps users of online platforms to understand their tax obligations? Where do users currently seek help?
Question 2: To what extent do users seek help from online platforms themselves? What evidence is available on how this support is used?
Question 3: What potential barriers do you think there are to users of online platforms in understanding their tax obligations? What evidence do you have about the impact of these barriers?
Question 4: In what ways do online platforms create new opportunities for individuals or businesses to deliberately avoid paying tax?
Question 5: In what ways do the above issues differ for users who think of themselves as being in business compared to those who do not?
Question 6: What further opportunities exist for platforms to work together with HMRC to help users understand and meet their tax obligations?
Question 7: What data do online platforms hold about their users and their activities on platforms? How could this data be used to help users to understand when they might incur a tax liability from their activity on the platform?
Question 8: What opportunities or challenges are created by users working across multiple platforms or working with platforms indirectly through intermediaries?
Question 9: Do you have any experience of these approaches? What evidence do you have about the impact of these interventions?
Question 10: Are any of these international examples particularly promising for the UK? How could they be designed most helpfully for a UK context?
Question 11: Are you aware of any platforms that have changed their operating model to account for any changes?
Question 12: Are you aware of any problems or challenges that have been presented by these policies? How could these be overcome?
Question 13: Do you think these policies are effectively targeted? Do you think they apply to the right set of online platforms?
Question 14: Are you aware of additional international evidence or examples? What can we learn from these?
