Proposed Due Diligence and Reporting Requirements on sellers
The UK’s HMRC have opened a consultation on the proposed The Platform Operators (Due Diligence and Reporting Requirements) Regulations. This covers the requirements for operators on seller Due diligence, record-keeping and annual reporting obligations for VAT. It includes penalties for failure to observe the requirements. The requirements will come into effect from 1 January 2024, with the first annual report being due by 31 January 2024.
EU and OECD reviews are also underway.
Due Diligence and record-keeping requirements
The UK regulations include requirements on:
- Collecting and maintaining information about sellers
- Information concerning property listings
- Reporting on each reportable period
This data should be reported each year by the 31 January of the following year. [The above data should be maintained for at least five years.
The following penalties will apply:
- £5,000 maximum if misses annual filing with £600 per day for further delay
- £5,000 for failing to keep adequate records
- £100 for each seller for failing to observe due diligence procedures
Overlap with EU DAC7 and OECD gig and sharing economy
The EU VAT in the Digital Age review in includes a stream looking VAT treatment of the digital economy, and in particular the role of electronic interfaces – platforms and marketplaces. Other countries requiring marketplace reporting include: France, Germany and Italy.
The 2024 deadline will put the requirements behind similar new rules in the EU DAC 7 standard coming in 2023 – first reporting due 2024.