Reporting rules for digital platforms: what a UK marketplace must report to HMRC
If your company is UK-based and contracts with the sellers of a marketplace, you report them to HMRC by 31 January and give each one a copy. Who is in scope, what to collect, the dates and the penalties, from HMRC's own texts.
Kreezalid10 min read
In short: since 1 January 2024, a marketplace run from the United Kingdom must collect and check identity details for its sellers, report each reportable seller’s income to HMRC by 31 January of the following year, and give every seller a copy by the same date. A late report costs up to £5,000, then up to £600 a day. HMRC’s two-year “soft landing” covered the reports due in January 2025 and January 2026 only: the report on 2026, due 31 January 2027, is the first one under the full penalty regime.
This guide is for people who run or plan a marketplace. It follows the regulations (SI 2023/817, which apply the OECD model rules), HMRC’s guidance on GOV.UK and HMRC’s internal manual, all read on 12 November 2026. It is information, not tax advice: check your own case with an accountant.
Am I concerned?
Is your website a “platform”?
HMRC’s guidance gives two conditions. Your app or website is a digital platform if both apply:
“it connects sellers to customers to supply goods or services, either directly on the platform, or indirectly by using third-party sellers of goods or services”
“you hold or can easily calculate the amount paid to sellers for goods or services, or you can find out the amount from a third party”
A marketplace that takes the buyer’s payment and pays the seller out meets both. A classified-ads site where buyer and seller settle between themselves, and where you cannot find out the price paid, does not. Nor does a shop selling only its own goods.
Four activities are covered: the sale of goods, personal services (deliveries, freelance work, taxi rides), the rental of immovable property and the rental of means of transport.
Are you the operator, and are you in the UK?
The rules bind the “platform operator”. You must register with HMRC if you run a digital platform and you reside in the UK, are incorporated under UK laws, or your business is managed in the UK.
A foreign marketplace with British sellers is outside the UK rules. HMRC’s manual says so (IEIM901400):
“POs which are not resident (or incorporated or managed) in the UK but which have UK resident Sellers, or Sellers who rent property in the UK, will not be RPOs for the purposes of the UK reporting rules. They may, however, be RPOs in another jurisdiction that is implementing the reporting rules.”
An individual who runs a platform as a sole trader is excluded too.
What if my marketplace runs on someone else’s software?
Then the question is who signs up the sellers. The manual defines the operator as “an Entity that contracts with Sellers to make available all or part of a Platform to such Sellers”, and adds (IEIM901200):
“Where a Platform provides software or an app that can be used by other entities and Platforms to facilitate the provision of goods/services by Sellers, the PO is the entity that contracts with the Seller, even if this is not the same as the Platform or entity which owns or operates the Platform.”
Its example has three companies: one provides the software, one processes payments, one onboards sellers. “The PO is the entity that contracts with the Sellers”, that is, the one that onboards them.
The reading these texts support: if your company’s terms are the ones sellers accept, your company is the operator, and the software vendor and the payment provider are not. HMRC also lists “software that only processes payments” and “software that only helps design and maintain websites” among the things that are not a platform. If your contracts are arranged differently, have them read.
Which sellers are reported?
Sellers who supply or are paid for goods or services on your platform during the year, and who live in the UK or in another country that applies the same rules (or rent out property there). Individuals and companies are both covered.
You do not report:
- Small sellers of goods. HMRC: “You do not need to report sellers getting a total of 2,000 euros or less (approximately £1,700) for fewer than 30 sales of goods in a year.” Both tests must be met, and the manual says several accounts of one seller are added together.
- Entities with more than 2,000 property rentals a year on the platform, listed companies and their related entities, and government-owned sellers.
The goods exclusion has no equivalent for services. HMRC is explicit that it “does not apply to” the provision of services, the rental of transport or the rental of immovable property. A driver or a host who earned £50 is reported.
If your whole business model has no reportable seller, or does not let sellers make a profit (cost-sharing rides, for example), you are an “excluded platform operator”. You still register and notify HMRC of that status.
The calendar of a reporting year
The reportable period is the calendar year. For 2026:
| When | What |
|---|---|
| Through 2026 | Collect and verify seller details, ideally at sign-up |
| 31 December 2026 | Due diligence must be complete for the year |
| 31 January 2027 | Be registered, have notified HMRC of your status, submit the report, give each seller their copy |
| Until 31 December 2031 | Keep the due diligence records: five years after the end of the period |
Registration is done online with a Government Gateway account. The report itself is an XML file in the OECD schema, submitted on GOV.UK. Operators that belong to the same group or are tied by contract can let one of them report for the others, but each must still register and tell HMRC.
What to collect from sellers
The list comes from the manual (IEIM902310).
For an individual: first and last name, primary address, date of birth, and the tax identification number with the country that issued it. For a UK resident that number is normally the National Insurance number.
For a company: legal name, primary address, tax identification number and its country, and the company registration number. For a UK company the registration number is the tax identification number. A VAT number does not replace either.
For property rentals: the address of each property listed.
You must also verify what you collect. HMRC expects you to look at the information “in the round” and to follow up on discrepancies or gaps.
A seller who refuses is your problem to solve before 31 December. The manual lets you make it a condition of using the marketplace: operators “may take steps to enable their systems to prevent uncooperative Sellers from proceeding with onboarding, or to limit their access to the Platform until the process is complete”. This is one more reason to collect tax details in your seller onboarding and not in a January rush. Much of it overlaps with the identity checks your payment provider already runs, but the duty to report stays with you.
What goes in the report
For each reportable seller: the identity details above, the country of residence, the total paid or credited during the year broken down by quarter, the number of sales or services behind that total, and any fees, commissions or taxes you withheld or charged. Where available, the bank account identifier the money was paid to.
What the seller receives
By 31 January you give each reportable seller the same information you sent HMRC. The manual (IEIM904500) leaves the format free but sets a floor:
“An RPO cannot meet the obligation by just providing a receipt for each task/ sale made”
The statement should show the seller’s identification details, the amounts by quarter, the activities and the fees, commissions or taxes withheld, and say that it is a copy of what HMRC received. An e-mail or an in-app notification is fine. A page buried where sellers “would not reasonably find it” is not.
A page to point your sellers to
Sellers will ask why you want their National Insurance number. HMRC has a page written for them: Selling goods or services on a digital platform. Two sentences from it answer most questions: “Platform operators have to give you a copy of the information they have reported to HMRC” and “This does not automatically mean that you owe tax.”
Penalties
All amounts are maximums, from the manual’s penalty pages (IEIM905110 to IEIM905170):
| Failure | Penalty |
|---|---|
| Report filed late | Up to £5,000, then up to £600 a day once HMRC has issued a notice |
| Copy not given to sellers | Up to £5,000 per reportable period, then up to £600 a day |
| Information HMRC asked for not provided | Up to £5,000, then up to £600 a day |
| Records not kept | Up to £5,000 per reportable period |
| No notification of your status | Up to £1,000 |
| Due diligence not carried out | Up to £100 per seller |
| Inaccurate or incomplete report | Up to £100 per seller record |
No penalty applies where you have a reasonable excuse and put things right without delay, or, for an inaccurate report, where you took reasonable care. The soft landing (IEIM905010) is over: for reports submitted by 31 January 2025 and 31 January 2026, HMRC “would only charge penalties where there was deliberate non-compliance”. Using a third party for due diligence does not move the liability: the operator “remains responsible”.
The other duty: VAT checks on overseas sellers
Separate from income reporting, HMRC can hold an online marketplace “jointly and severally liable for unpaid VAT” of an overseas seller that should have registered for UK VAT. Its guidance on seller checks (page dated 31 December 2020, still in force when we read it) asks you to check such a seller’s VAT registration number, validate it within 10 days of receiving it, and:
“You must display a verified VRN on your website within 10 days of the seller giving it to you.”
If HMRC sends you a liability notice about a seller, you usually have 30 days to stop that seller from offering goods to UK customers. Our older article on marketplace VAT liability in the UK tells how these rules started.
Frequently asked questions
Do marketplaces report sellers to HMRC?
Yes, when the marketplace operator is UK resident, incorporated or managed. It reports each reportable seller’s identity and quarterly income by 31 January after the calendar year, and gives the seller a copy by the same date. The rules started on 1 January 2024.
Who is the platform operator when the marketplace uses third-party software?
HMRC’s manual says the operator is “the entity that contracts with the Seller, even if this is not the same as the Platform or entity which owns or operates the Platform”. On that reading, the company whose terms the sellers accept is the operator, not its software vendor.
Is there a threshold below which a seller is not reported?
Only for goods: a seller with fewer than 30 sales of goods and 2,000 euros or less (about £1,700) in the year is not reported. Both conditions must be met. There is no threshold for services or rentals.
Does a foreign marketplace with UK sellers report to HMRC?
No. HMRC’s manual says such operators “will not be RPOs for the purposes of the UK reporting rules”. They may have to report in their own country if it applies the same rules.
Does being reported mean the seller owes tax?
No. HMRC’s page for sellers says a report “does not automatically mean that you owe tax”. It shows what was earned on the platform. Whether tax is due depends on the seller’s own situation.
The same question in other countries
- United States: Form 1099-K for marketplaces, and who files it on Stripe Connect.
- Canada: Part XX reporting rules for digital platform operators.
- Australia: the Sharing Economy Reporting Regime.
For the wider question of what sellers and buyers expect from an operator, see our guide to trust on a marketplace.
What Kreezalid prepares for you
On the Grow and Extend plans, your back office has a page called Seller statements, under Sales. It adds up what each seller was paid over a calendar year, quarter by quarter: number of sales, net amount paid, and the fees and commissions you withheld. Each currency has its own table, and nothing is converted.
- For you: the list of every seller paid in the year, with a CSV export to check, or to hand to your accountant.
- For each seller: their own statement in their seller space, ready to print or save as a PDF.
- A hint, not a ruling: sellers under 30 sales of goods and €2,000 are flagged, from your marketplace’s figures alone.
The statement names the reporting rules for platform operators in general terms, so check the figures against what you report to HMRC before you hand it over as the seller copy.
What it does not do yet: it does not e-mail the statements, it does not collect tax identification numbers or tax residence from your sellers, and it does not produce the file for the tax authority. Those are the next steps on our roadmap. You remain the operator: Kreezalid computes the figures and files nothing on your behalf.
See what each plan includes on the pricing page.
Sources
All read on 12 November 2026.
- The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023, SI 2023/817.
- GOV.UK guidance: Check if you need to register as a digital platform operator (updated 21 July 2026; the former “Reporting rules for digital platforms” page now redirects to it), Register as a digital platform operator, Selling goods or services on a digital platform.
- HMRC International Exchange of Information Manual, Reporting Rules for Digital Platforms: IEIM901100 to IEIM901630 (scope), IEIM902230 to IEIM902540 (due diligence), IEIM904110 to IEIM904500 (reporting, information for sellers), IEIM905010 to IEIM905400 (penalties).
- GOV.UK guidance: VAT checks on overseas sellers by online marketplaces.