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Published on 15 December 2022

Draft Regulations: The Platform Operators (Due Diligence and Reporting Requirements) Regulations

We have submitted some comments on the draft Regulations which implement the Organisation for Economic Co-operation and Development’s (OECD) Model Reporting Rules for Digital Platforms.

LITRG Response: Draft Regulations: The Platform Operators (Due Diligence and Reporting Requirements) Regulations image of a woman working on a laptop at her desk.

Very broadly these rules will require UK platform operators to collect, verify and report certain details of sellers who work on their platform to HMRC, and to provide a copy of the reported information to sellers

In our response, we mainly focus on the requirement that reports must be made to sellers as well as HMRC. This is an important feature of the rules and could help sellers to comply and complete their tax returns correctly.

We tell HMRC that to make the reports as user friendly as possible, the Regulations should stipulate the format in which the data should be presented to the sellers by the platform operators, to ensure it is easily understandable and consistent. We also say HMRC should consider whether there will be any consequences for platforms if they fail to meet their obligations to sellers.

The Regulations say that a platform operator is not required to make a report to HMRC or the seller where it reasonably believes that another platform operator will report the required information. We question what constitutes reasonable belief in these circumstances. We are also concerned that it may leave workers without some of the information they need to be able to deal with any tax obligations.

More generally we say:

  • HMRC should confirm if a full EQIA has been done, given the difficulties we think platforms will face in verifying some workers and the impact this may have on their ability to earn a living.
  • HMRC need to be resourced properly to manage the rules and everything that flows from them.
  • Some kind of post implementation review should be carried out to evaluate the effectiveness of the rules and whether any further actions are required.
  • We would like to join a working group to discuss the implementation of the rules and develop good guidance for workers to help them make sense of the reports they are given by the platforms.

The draft Regulations can be found here: https://www.gov.uk/government/consultations/draft-regulations-the-platform-operators-due-diligence-and-reporting-requirements-regulations

Our response can be found here

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