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Online Platforms – Spring Statement 2018

Online platforms and marketplaces are seen as being good for the economy and for consumers, who benefit from lower prices and more choice. However, some people who earn money from using these platforms may never have earned money without an employer to act as an intermediary between them and HMRC before, and can find it difficult to understand and meet their tax obligations. Most people want to comply with their tax obligations and the government believes the system should help them, but limit opportunities for the minority who seek to avoid paying their fair share.

The consultation, entitled The role of online platforms in ensuring tax compliance by their users, will explore how the government can build on work already undertaken with online marketplaces to gain a better understanding of how platforms interact with their users currently, what they know about them, and understand more about attitudes to tax among people earning money through platforms.

The government wants to ensure that, where people have tax obligations because of these new opportunities, it is as easy as possible for them to comply. However, research suggests that some who provide goods or services through online platforms do not fully understand or are unaware of their tax obligations. For example, HMRC research found a quarter of those operating in the sharing economy through online platforms are not confident about their knowledge of tax obligations.

At the same time, there will always be those who seek to exploit opportunities to undermine the tax system. Some platform users will be existing businesses or individuals taking advantage of platforms to access new markets, and of those, as with the wider business population, there will be a minority who try to avoid paying their fair share.  The government needs to minimise opportunities for people to exploit this area of the economy to evade their tax obligations, at the same time as supporting those who want to comply. It is keen to explore what role platforms could play in tax administration, in the way other intermediaries, such as employers, have done in the past and continue to do.

The government intends to focus this work principally on direct tax in the first instance. However, it recognises that there may be similar challenges and opportunities in the wider tax system. The government will consider in due course whether the outcomes of this work could be applied more widely.

The consultation will run until 8 June 2018.

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