There are many potential pitfalls for the unwary property developer and key amongst them is tax. We have outlined 10 of the most common tax pitfalls or missed opportunities we have come across.
Tax Man Set to Clamp Down on Online Tax Evasion!
10 September 2021
Mark Friend
Digital & Tech, Accounting & Compliance
Year by year the net has been closing in on individuals who fail to declare their incomes. The latest attack focuses on digital platforms such as Airbnb and similar online accommodation sites, tax and private hire services, food delivery services, freelance work, shopping platforms for resellers etc…. There are literally thousands of websites where individuals can generate income and there is a common assumption among them that “the tax authorities won’t find me because my income level is so low and they are under resourced”.
The government has been well aware of this for some time and on 30th July 2021 it published a consultation document entitled “Reporting rules for digital platforms” . This outlines a new scheme where from January 2023 the digital platforms would have to report to the tax authorities details of anybody who was generating income on their platforms.
This information will enable the tax man to quickly identify all those individuals who are not declaring their income.
The consultation will run from 30 July 2021 to 22 October 2021 but if legislated will add another administrative layer to digital platforms of all sizes – basically any platform (websites or apps) that facilitate transactions between providers of goods and services (sellers) and their customers.
If the legislation goes ahead the platforms would need to make sure they properly identified the provider, kept the necessary details of who they are and the income generated on the site, reported the information to the taxman and supplied a report to the provider to help them prepare their own tax returns.
This could potentially have a dramatic impact on platforms that enable individuals to generate income so it might be worth reviewing the document and having your say now.
We will off course keep you informed of developments but this is yet another step on the road to reducing tax non-compliance but at the same time potentially adding an administrative burden and cost to the platforms.
The content in this blog is correct as at 10 September 2021 See terms and conditions.
