HMRC have set out new regulations for UK intermediaries, including agencies and online booking platforms: The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023. The changes came into effect on the 1st January 2024 and aim to improve tax compliance and transparency. This law does not however change how much tax you need to pay or how you pay it. You can see the legislation here.
The Scheme operates on a calendar year 1st January to 31st December and platforms and agencies will be required to report quarterly to HMRC and the end of March, June, September and December.
Platforms and agencies must submit the initial report to HMRC by 31st January 2025
For the first year (2024), they are not required to provide this information to the HMRC for owners who were contracted to the platforms / agencies prior to 1st January 2024. Their first reporting period will be in 2025 (due 31st January 2026).
Whilst the expectation is for platforms to report owners’ information by the 31st January 2025, HMRC have not yet shared detailed information on how to safely submit this information. This is yet to be determined and communicated.
What information will platforms be expected to report to the HMRC?
The HMRC refers to payments or values received by owners as ‘Consideration’. This is ‘any form of cash payment, cash credit, or cash equivalent received’ by the short-term let owner. Consideration is the net amount paid or credited to the owner after deducting any fees, commissions, and taxes. We are required to report on the net amount, as well as the breakdown of the deducted fees. Our reporting must be done on a cash basis, not on an accrual basis.
Will this apply to all owners who market their holiday lets through any platform (e.g. Airbnb, VRBO, etc)?
Yes. The only exclusions are non-profit models, Government entities/local authorities, large hotel providers, and quoted companies.
I am not resident in the UK – does this affect me?
Yes. Income earned in the UK by all owners, regardless of where they live, must be reported to HMRC. It’s essential to ensure that all the necessary information has been provided to us, including any international tax identification numbers.
There are multiple owners of my short-term let. Do we need to do anything differently?
In this instance, the agency / platform will report on the registered owner or owners. They will report the total amount paid for each individual, as it is not possible to disaggregate the total amount to show individual shares of the income.
Can I report my income to HMRC independently to avoid platform errors?
While platforms / agents are required to report your income, you are still responsible for your own tax return. You should include all income from your property or properties in your tax return, regardless of platform reporting.
I am VAT registered – how does this affect me?
Platforms / Agencies must report the net amount paid, which will include an element of VAT. Although not yet communicated by HMRC, the guidance does comment that they must report all known tax numbers, which it is anticipated will include your VAT registration number so HMRC can identify those reported amounts that will include an element of VAT.
What happens if an owner does not cooperate with their platform?
HMRC guidance advises suspension of listings and withholding of funds if an owner is uncooperative. All platforms are expected to meet the deadlines outlined in the timescales above, submitting accurate information for all relevant short-term let owners. Failure to do so will result in penalties for the platform.
Author of Guidance: ASSC – drawn from various sources
Contact: communications@assc.co.uk
Website: The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023
Date of Guidance: November 2024
Version Number: V1
Disclaimer – Guidance Sheets are written by experienced Members of the ASSC and other experts. The information in the ‘Guidance Sheet’ is provided by the ASSC for use by Members in support of their own independent business decisions. It does not constitute advice or instruction for which the ASSC can be held liable in any way whatsoever. All Members and other readers remain responsible for the consequences of any decisions taken whether in the light of information gained from this Guidance Sheet or not.