Practical, technical advice on DPR and DAC7 reporting for gig-economy and digital platforms.

Digital Platform Reporting (DPR) is the UK's rule requiring all digital platforms enabling users to earn money to report those earnings to HMRC. This means marketplaces, gig-economy apps, property rental sites, vehicle rental platforms, cat sitting communities - any service where one user can pay another user for goods or services. If your platform does this, then you have an obligation to report user earnings over certain thresholds.

DAC7 is the EU's equivalent, built on the same OECD model. The same rules and thresholds apply regarding reporting, and the underlying mechanics are basically the same.

Most UK platforms with an international seller base, or who expand their operations into other EU countries end up needing both: DPR to report UK activity to HMRC, DAC7 for any EU-resident sellers.

Not necessarily.

Per the HMRC and DAC7 guidelines, if you can prove that your sellers make no profit, or that you have no reportable sellers at all, then you can register as an excluded platform operator.

For example, if a platform organises ride-shares, and the users who join the seller's offered ride contribute only to the cost of travel, then that platform would not need to report.

Not necessarily.

• If you are a UK company, operating only in the UK - you only need to make a submission to HMRC.
• If you are a UK company operating in other EU countries which currently have a partner jurisdiction agreement with the UK - you only need to make a submission to HMRC.
• If you are a UK company operating in other EU countries which do not currently have a partner jurisdiction agreement with the UK - you will need to make two submissions - one to HMRC and one to just one of the EU member states you operate in.
• If you are an EU registered company with no UK operations - you should make your submission in the country you were incorporated in.
• If you are an EU registered company with UK operations too - you should make your submission in the country you were incorporated in and make a submission to the HMRC for your UK sellers.
• If you are a company registered outside the EU, with no UK operations - you can choose a single jurisdiction that you are active in to submit your DAC7 filing to.
• If you are a company registered outside the EU, with UK operations as well - you can choose a single jurisdiction that you are active in to submit your DAC7 filing to, but you must make a separate submission to HMRC for your UK sellers too.

It is becoming increasingly common, as countries look to clamp down on individuals side-gig earnings reporting. For example, Canada and New Zealand both require the submission of seller earnings, and both are closely aligned with the OECD reporting format that the UK and EU use. Most of the advice and tooling I can provide will put you in a good position for these countries as well.

Other countries, such as Australia, China and the US have their own reporting formats. I have not worked with these at this time, so I could not advise directly on them. However, if your business needs to report in any of these countries then I would be happy to work through that process with you.

If your platform connects sellers or service providers with customers, you need to gather details like each seller's name, address and tax number, work out what they earned, your platform's earnings, and the total transactions through the platform each year, and report it by the following January. Each year must be broken out into quarterly totals, too.

That's right. Even in the UK, the platform submission reporting periods are January - January.

You must make these reports available to your users too, so that they can use them to help make their own tax returns. This is much less useful for UK users, who have to report April 6th - April 5th, but you still need to make them available in that year + quarterly format.

The specific information you need to collect is given on the HMRC site, and is the same for DAC7. Note that you are expected to perform due diligence on the information that you collect, for example verifying that National Insurance numbers for UK based sellers match the correct format.

You are expected to prevent sellers from earning on your platform if they have not provided the information required for them to be reportable. After two reminders and 60 days, you must either close their account and stop them re-registering, or withhold their payment until they provide it - you can view the DAC7 directive here.

Lucky you... You will need to retrofit your compliance if you have not already done so, and make submissions for previous years.

• If you are not already collecting all the information linked to above, then you will need to start collecting it.
• You will need to reach out to your existing users and get them to complete the new required information.
• Existing users should be prevented from making further earnings until they have completed the required information.
• New users should be prevented from earning on your platform until the required information is completed.
• You will need to make retrospective submissions for seller earnings once their information is complete.

For the UK, the DPR requirement applies from the 2024 reporting year onwards, with first reports due by January 2025. If you have not made those submissions yet, but have had sellers earning since that time, you will need to make a submission for each applicable year.

For DAC7, the same applies, but the first reporting period that needs to be submitted is 2023, with first reports due by January 2024, and it covers any platform with EU-resident sellers, whether or not the platform itself is based in the EU.

You do not need to use an accountancy firm to make your submissions.

• You need to register as a Platform Operator.
• You need to start collecting the information outlined above on your platform.
• You need to be able to extract your sellers earnings and convert them into the required OECD XML format - I can help with that.
• You can then submit that XML file to HMRC and/or your selected EU body yourself.
• You also need to provide a copy of what you submitted to your users for their records.

If you choose to use an accountancy firm to help you with this process, note that they will still require you to provide them with the seller information in a format that they dictate, which they will then verify and convert into the correct XML format. They will then handle the submission to HMRC and/or the selected EU body. You will still need to complete the other steps yourself.

For individuals selling goods, there are minimum thresholds per reportable period (year). A seller must be reported if:

• They made 30 or more relevant transactions in the year
• or their total earnings exceed €2000 in the year

These apply to both DPR and DAC7, and you read it right, the threshold amount is €2000 for both - that's not a typo.

Note:
These thresholds only apply when selling goods. If your users are providing services, these thresholds do not apply. You must report them if they make any earnings at all.

Maybe you landed on this page whilst looking for clarity on DPR / DAC7 obligations, and you've now found the answers you were looking for. In that case, I am happy that I was able to help - that's what this information is there for!

If not, then there are two ways I can help you - advice, and tools.

Advice

I have been through backporting DPR and DAC7 compliance to an existing platform, getting earnings data into the correct XML format for submission, validating it, and making sense of submission errors. I can advise you on all aspects of this and provide tips for your team on approaches and best practices for making your submissions a success whether you do them yourself, or pay an accountancy firm to do them for you.

Tools

I have tools already written to help turn an export of your earnings data into a submittable XML format. Complete with validation against business rules, and support for data mapping and transformations, we can get your data into a format that should be submittable with a minimal number of round trips. If you wish to keep your data in-house, then I can provide your development team with the right tools. If you would prefer not to have to maintain it yourself, I can do it for you.