In his Spring Statement, Chancellor Philip Hammond revealed on Tuesday that the Government will explore how online platforms “could work with HMRC and taxpayers to help people who make money through the platforms understand and meet their tax obligations.”
The Treasury has since released a consultation, stating it “needs to minimise opportunities for people to exploit this area of the economy to evade their tax obligations”.
AJ Bell and Hargreaves Landsdown have told Financial Planning Today they believe the focus is on other forms of online platforms such as those selling goods direct to consumers.
Sarah Coles, personal finance analyst at Hargreaves Landsdown, said: “This consultation is more focused on gig economy platforms, and whether there ought to be changes to the way websites like eBay and AirBnB work - to make it easier for people to see they are building up a tax liability, and easier for tax authorities to collect that money.
“This could mean, for example, that they may have to inform people making money from the platform that tax is due; they could be encouraged to produce an annual statement of gross income; and they may be required to either report it to the tax authorities, or withhold part of the profits.
“This is unlikely to have an impact on financial platforms, which already provide a consolidated tax statement and report to the tax authorities.”
AJ Bell agreed with Ms Coles’s assessment. It believes the probe will not apply to investment platforms, saying it is more about “new market places and the gig economy”, pointing to the scope outlined in the detailed documents.
This stated: “Scope 2.1. The term ‘online platforms’ could be understood in several ways – the availability and exploitation of new technology has enabled the development of a wide range of businesses. For the purposes of this work, we are interested principally in platforms that: facilitate the sharing economy (eg by allowing people to earn money from resources they are not constantly using, such as cars or spare rooms); that facilitate the gig economy (eg by allowing people to use their time and resources to generate income); or that connect buyers with individuals or businesses offering services or goods for sale.”