Users of Online Marketplace Platforms - HMRC One to Many Letter Campaigns
17 Jan 2023
HMRC have advised us about two One To Many (OTM) Letter Campaigns connected to the use of online marketplace platforms. The first relates to earnings from online marketplace sales and is badged as a ‘status check’ letter. The second relates to earnings from creating content on digital platforms. HMRC began issuing both sets of letters in the week commencing 16 January 2023. Copies of both letters are provided below.
- HMRC are writing to taxpayers who they believe have sold service(s) online but have not informed HMRC of their income so that they can pay any tax owed on it. HMRC believe that these people have traded and earned over their Personal Allowance (currently £12,570).
- The letters advise the taxpayer that HMRC hold third party information that shows their trading activity.
- The letters provide actions for the taxpayer to take and timelines to follow.
- They are requested to complete a ‘Certificate of Tax Position’ within 30 days and tick the box which best describes their circumstances.
- The CIOT has provided guidance to members about how to handle ‘Certificates of Tax Position’ in relation to other HMRC OTM letters – see here and here - particularly the sections headed “What you should do if a client receives one of these letters from HMRC” and “In view of the serious consequences of making a false declaration, consider very carefully whether your client should sign and return the certificate of tax position”. You may find this guidance useful when deciding how to respond to these online marketplace letters.
- HMRC are suggesting that if taxpayers have previously undeclared income to disclose they must submit a Notification of Intent to disclose it, using HMRC’s Digital Disclosure Service (DDS) process. However, depending on the individual circumstances of the taxpayer, other approaches may be better, for example Code of Practice 9 where fraud is suspected.
- The letters have been copied to the taxpayer’s authorised agent if they have one.
- For the online marketplace status check activity HMRC also have an online guidance page on Gov.UK, to support those who need it – here.
- The creating online content activity is a joint project being conducted across several lines of business within HMRC resulting in a number of coordinated interventions taking place. HMRC have told us that activity will continue into 2023 and beyond. In addition to the work being undertaken by HMRC, other members of the Joint Chiefs of Global Tax Enforcement (known as the J5) are looking at undertaking internationally co-ordinated action.