The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023

EXPLANATORY NOTE

(This note is not part of the Regulations)

These regulations make provision implementing the OECD (2020), Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy, OECD, Paris and the OECD (2021), Model Reporting Rules for Digital Platforms: Optional Module for Sale of Goods, OECD, Paris (together the ‘model rules’). They impose obligations on certain persons who operate digital platforms (known as ‘reporting platform operators’). Reporting platform operators are required to carry out due diligence on users of their platform (known as ‘sellers’), to report information about the sellers to HMRC and to provide a copy of the information to the sellers themselves.

Part 1 contains introductory provisions. Regulation 1 makes provision for citation and commencement. Regulation 2 is an interpretation provision.

Part 2 imposes due diligence and reporting obligations on reporting platform operators. Regulation 3 provides that reporting platform operators must apply due diligence procedures to sellers in accordance with section II of the model rules. Regulation 3(3) requires reporting platform operators to keep records of that due diligence for a specified period. Regulation 4 provides that reporting platform operators must make a report to HMRC containing specified information about sellers in respect of each reportable period (calendar year). Regulation 4(4) requires a reporting platform operator to provide a copy of the information reported to HMRC about a seller to that seller. Regulation 4(5) provides an exemption from reporting in certain circumstances. Regulation 5 provides that reports must be made using an electronic reporting system and provides rebuttable presumptions in respect of those reports. Regulation 6 requires a person whom an officer of Revenue and Customs reasonably suspects is a reporting platform operator to provide information to HMRC on request. Regulation 7 requires persons who are reporting platform operators to notify HMRC of that fact. Regulation 8 requires persons who are subject to an exclusion in the model rules, in the absence of which they would be reporting platform operators, (known as ‘excluded platform operators’) to notify HMRC that they are excluded platform operators. Regulation 9 provides that, where a reporting platform operator elects under section II of the model rules to apply due diligence procedures to a subset of the sellers on their platform (known as ‘active sellers’), that election must be made by notice to HMRC. Regulation 10 provides that various thresholds in the model rules pertaining to whether a seller is an ‘excluded seller’ for the purposes of these regulations are to be proportionally reduced in cases where the seller has been registered on the platform for only part of a reportable period.

Part 3 provides penalties for failures to comply with obligations in the regulations. Regulation 11 imposes penalties for late reports. Regulation 12 imposes penalties for failure to provide information to reportable sellers. Regulation 13 imposes penalties for failure to provide information to HMRC. Regulation 14 imposes penalties for failure to comply with record-keeping requirements. Regulation 15 imposes penalties for failure to apply due diligence procedures. Regulation 16 imposes penalties for failures to make notifications to HMRC. Regulation 17 imposes penalties for inaccurate or incomplete reports to HMRC. Regulation 18 provides that liability to certain penalties does not arise where a person has a reasonable excuse for a failure to comply with the regulations. Regulation 19 provides that a person cannot be liable to a penalty under any two or more of regulation 14 (failure to comply with record-keeping requirements), 16 (failure to apply due diligence procedures) and 17 (inaccurate or incomplete reports) in respect of the same act or omission. Regulation 20 provides for assessment of penalties by HMRC. Regulation 21(1) and (2) provides for time limits for the assessment of penalties and regulation 21(3) and (4) provides for how the penalties are treated. Regulations 22 and 23 provide for appeals against assessments to penalties.

A Tax Information and Impact Note (TIIN) covering this instrument will be published at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.