If you earn income through online marketplaces, property rental websites, freelance platforms, food delivery services or cryptocurrency transactions, it’s important to understand how HMRC online seller reporting is changing tax compliance.
While the underlying tax rules have not changed, digital platforms now send significantly more information directly to HMRC. This increased visibility helps HMRC identify taxpayers who omit income, underreport earnings or make reporting errors. As HMRC gains access to more platform data, online sellers, landlords, freelancers and gig economy workers should ensure they report their income accurately.
What’s Changed?
Since January 2024, the Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 have required digital platform operators to collect information about sellers and submit annual reports to HMRC.
The rules apply to a wide range of platforms, including online marketplaces, property rental websites, gig economy apps and freelance marketplaces. Similar reporting requirements will apply to crypto asset providers under the Crypto Asset Reporting Framework, with the first reports expected in 2027.
As a result, HMRC online seller reporting now gives HMRC access to extensive data that it can compare directly against tax returns and other information already on record.
How HMRC Online Seller Reporting Is Increasing Tax Transparency
Platform operators must verify seller details and report names, addresses, dates of birth and tax identification information to HMRC. Where businesses use these platforms, operators may also report company registration details.
According to Freedom of Information data, HMRC received information on approximately 1.5 million sellers for 2024 and almost 4 million sellers for 2025. During the same period, reported transaction values increased from £25.5 billion to £54.8 billion.
Although HMRC is still developing large-scale compliance activity using this data, we expect compliance teams to use platform reporting information routinely during future compliance checks and tax enquiries.
Where Problems Commonly Arise
Many people assume that income earned through online platforms is not taxable. While HMRC generally excludes occasional sales of unwanted personal belongings from tax, people who regularly buy, make or sell goods for profit may be carrying on a taxable trade.
Freelancers, gig economy workers and property owners can also face challenges when tracking income and maintaining accurate records. Without reliable records, taxpayers may struggle to reconcile platform income with their tax returns.
International reporting arrangements now give HMRC greater visibility over overseas platform activity and crypto asset transactions. As data-sharing arrangements continue to expand, HMRC can increasingly identify income earned through overseas platforms and digital assets.
What Should You Do?
If you earn income through online platforms, now is the time to review your records and reporting obligations. Keep accurate records, retain platform earnings summaries and ensure your tax returns reflect all taxable income.
If HMRC sends you a letter about platform income, do not ignore it. These letters often encourage taxpayers to review their tax position rather than indicate wrongdoing. However, you should still take them seriously and seek advice if you have concerns.
How We Can Help
Our team can help you understand your obligations under the HMRC online seller reporting rules, review income received through online platforms and ensure your tax returns accurately reflect your circumstances.
If you have concerns about historic income that you did not declare, seeking professional advice early can often reduce potential penalties and improve the outcome compared with waiting for HMRC to contact you.
If you would like to discuss your circumstances, please get in touch with our team.