To combat tax evasion and increase revenue, the UK’s HM Revenue and Customs (HMRC) has introduced new tax rules starting January 1, 2024, aimed at small sellers on platforms like Etsy, Depop, Airbnb, and Vinted.

These rules require platforms to record and report sellers’ income directly to HMRC, following guidelines from the Organisation for Economic Co-operation and Development (OECD). While HMRC already has power over UK platforms, the OECD rules will facilitate quick access to data from platforms outside the UK. This affects around two to five million businesses on digital platforms, including taxi services, food delivery, freelancers, and short-term rentals.

Platforms will gather sellers’ information like name, address, earnings, and fees, including property details for landlords. Sellers meeting their tax obligations won’t be much affected, but those neglecting them may face HMRC demands.

Individuals can earn up to £1,000 extra annually, called the Trading Allowance, tax-free, but surpassing it requires tax reporting. Sellers renting through platforms like Airbnb can utilize the rent-a-room scheme for tax-free earnings up to £7,500 yearly.

HMRC plans to send reminders to those unaware of their tax duties regarding online earnings. They’ve allocated £36.69 million and 24 full-time staff to enforce these rules.

The first reporting deadline for platforms is January 31, 2025, one year after implementation.