This week, we bring you news of guidance on the new UK reporting rules for digital platforms which come into operation from 1 January 2024 and HMRC has also published new guidance on the VAT treatment of local authority leisure services. The most recent notes of HMRC’s Guidance Strategy Forum are available and the Public Accounts Committee has recently released its report “Progress with Making Tax Digital”, which is highly critical of the programme. HMRC has also contacted us about work which has been ongoing with the Advertising Standards Authority specifically in relation to some repayment agents.
UK reporting rules for Digital Platforms
From 1 January 2024, UK digital platform operators will be required to report details of their sellers to HMRC. Last month HMRC published detailed technical guidance in its International Exchange of Information Manual (part IEIM900000) which aims to assist platform operators in complying with the new rules.
UK resident platform operators may also be required to report under the OECD’s DAC 7 rules which took effect from 1 January 2023. However, DAC 7 contains a provision to prevent double reporting by platforms that are within the scope of both DAC7 and the UK’s new reporting rules. As a result, UK platforms can report directly to HMRC rather than reporting to an EU Member State but only if that Member State has signed up to exchange information with the UK. If that is the case, the platform only needs to report to HMRC from 1 January 2024 as HMRC will subsequently exchange information with the relevant EU Member State’s tax authority.
Note that as DAC 7 has been in force since 1 January 2023, UK resident platforms are still required to report transactions 1 January 2023 and 31 December 2023 under DAC7, i.e. to the relevant EU Member State.
New guidance on the VAT treatment of local authority leisure services
HMRC has published new guidance for local authorities that deals with the treatment of supplies of sport/leisure services. According to an email from HMRC, the guidance has been developed in conjunction with local authorities via The Chartered Institute of Public Finance and Accountancy and other local authority VAT forums.
HMRC therefore says that the guidance achieves the aim of giving local authorities the information they need to implement the recent change in treatment of their supplies of sport/leisure services.
Advertising Standards Authority joint work with HMRC
HMRC has been working with the Advertising Standards Authority (“ASA”) to publish an enforcement notice related to misleading adverts by some repayment agents. The enforcement notice which published earlier this month on 5 December 2023, was jointly-issued with HMRC and provides guidance to promoters of tax repayment agent services. The notice applies across all media which targets UK consumers and sets out that those who fail to comply will be subject to sanctions.
This was followed by the publication of a Press Release which provides more information on the ongoing collaborative work between HMRC and ASA in this area.
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