On July 30, 2021 the UK Government Government opened a public consultation on the implementation of the Organisation for Economic Co-operation and Development’s (OECD’s) Model Reporting Rules for Digital Platforms. From January 2023, these rules will require platforms to report information about the income of sellers providing goods and services to help sellers get their tax right and to enable HMRC to detect and tackle non-compliance. The consultation closes at 11:45pm on October 22, 2021.
As the model rules have already been consulted on and agreed at an international level, the government intends to follow them closely to ensure a consistent and standardised approach. However, there are areas of the model rules which are optional for jurisdictions, or where jurisdictions have some discretion about how they are implemented, such as the optional extension to the sale of goods and transport rental published in June 2021. This consultation sets out the details of the OECD model rules at the start of each section, points out where there is scope for any change, and then presents the government’s proposed approach to implementing the optional or discretionary elements.
This consultation seeks views on the government’s proposals on those optional or discretionary elements, not on the main rules or their details. It also welcomes comments on the impacts for business from the UK’s proposed implementation of the model rules. Since this consultation is taking place during stage 2 of the process. The purpose of the consultation is to seek views on the detailed policy design and a framework for implementation of a specific proposal, rather than to seek views on alternative proposals.
Summary of consultation questions
Chapter 2 (Scope)
Do you agree with the government’s proposals on excluding certain platform operators? Please indicate whether you think platforms would make use of the exclusions in practice and what factors might influence these decisions.
Are the definitions on the scope of the model rules sufficiently clear? Are there scenarios not anticipated by the rules where guidance is needed?
Is any additional guidance needed in light of the government’s plans to adopt the extension of scope in its implementation of the model rules?
Do you have any comments on how you would like the interactions of the model rules and DAC 7 to operate in practice?
Chapter 3 (Due diligence)
Do you have any comments on the practical application of the rules on collecting the required information about sellers and rental property?
Which number, or combination of numbers, would be appropriate to use as a Tax Identification Number (TIN)? Please give reasons to support your view.
Do you have any comments on the practical application of the rules for collecting and verifying the data?
Would stakeholders (both sellers and platforms) find a Government Verification Service useful if one was available? Please give reasons for your view.
Do you have any comments on the practical application of the rules in relation to the timing, active seller option and third party due diligence requirements?
Chapter 4 (Reporting)
What are your views on the government only offering the option to submit reports directly in an XML file format and removing the manual reporting option? Would you use an API to share info with HMRC if it was available? Please explain your answer.
How could platform operators provide information to sellers about their income at an earlier point to make it more useful?
How can HMRC and platform operators work together to provide appropriate information to sellers to help them understand and comply with their tax obligations? What guidance would sellers find useful?
Do you have any comments on the practical application of the rules relating to the reporting requirements?
Chapter 5 (Administration and enforcement)
Does the proposed penalty approach meet the government’s objectives of being reasonable, proportionate and effective in ensuring compliance with the model rules?
Chapter 6 (Assessment of impacts)
What additional one-off or regular costs do you expect to incur to comply with the requirements of the model rules? Please provide any information, such as costs, staff time or number of sellers/platforms affected which would help HMRC to quantify the impacts of this measure more precisely.
Click here to be forwarded to the consultation as available on the website of the UK Government.
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