Tax crackdown to target businesses on Airbnb and App Store
Anyone running a business online through an app store, listings site or similar services could face new scrutiny on tax as part of a government crackdown on tax evasion.
Under the new terms, Airbnb, Apple, Amazon eBay and Gumtree could all be required to hand over user information to the government.
HM Revenue & Customs has proposed an extension of its powers to go after businesses that make money online and don’t declare it. It said the “hidden economy” cost the treasury £5.9bn a year in lost tax revenue.
The information HMRC will require is likely to include names and addresses of sellers, advertisers and app developers on a variety of platforms as well as the value of transactions made.
HMRC doesn’t name any companies in its consultation document but does outline the areas it will target: advertising, app stores and booking and reservation services. As such it is likely Amazon, Apple, Airbnb and Gumtree will all be required to hand over details of businesses operating on their platforms.
HMRC explained that data provided by these companies could be compared against data it already holds, allowing it to spot tax evaders. It said clamping down on tax revenue lost in this way could raise £860m by 2021.
Similar data is already collected from credit card companies and the proposals to gather information from app stores and other online platforms will likely become law next year. As well as collecting more data from online platforms HMRC is also likely to launch a new “disclosure channel” to allow online businesses to submit details of untaxed revenue.
Individuals selling personal possessions online would not be targeted, it explained, with businesses that fail to pay tax on online sales the main target of the crackdown.
HMRC said the consultation and proposed changes were focussed on making it easier for businesses to report taxable income while also “narrowing” the hidden economy tax gap. A 12 week consultation on the proposals runs until 14 October.
