New HMRC regulations for online intermediaries

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You may be aware that HMRC have set out new regulations for UK intermediaries. These apply to kate & toms as an online booking platform. The changes came into effect on the 1st January 2024 and aim to improve tax compliance and transparency. This law does not however change how much tax you need to pay or how you pay it. You can see the legislation here.

The Scheme operates on a calendar year 1st January to 31st December and kate & toms will be required to report quarterly to HMRC and the end of March, June, September and December.

Kate & toms must submit the initial report to HMRC by 31st January 2025.

For the first year (2024), we are not required to provide this information to the HMRC for owners who were contracted to kate & toms prior to 1st January 2024. Their first reporting period will be in 2025 (due 31st January 2026).

Whilst the expectation is for platforms to report owners’ information by the 31st January 2025, HMRC have not yet shared detailed information on how to safely submit this information. This is yet to be determined and communicated.

What information will platforms be expected to report to the HMRC?

• Information about the platform- Kate & Toms Ltd, registered name, address and Tx ID.

• Information about the individual properties listed on the platform including street address.

• Short term let owner details. This includes full name, primary address (for tax purposes) date of birth, Financial Account Identifiers and and known tax Identification.

Income

The HMRC refers to payments or values received by owners as ‘Consideration’. This is ‘any form of cash payment, cash credit, or cash equivalent received’ by the short term let owner. Consideration is the net amount paid or credited to the owner after deducting any fees, commissions, and taxes. We are required to report on the net amount, as well as the breakdown of the deducted fees. Our reporting must be done on a cash basis, not on an accrual basis.

FAQ’s

Will this apply to all owners who market their holiday lets through any platform (e.g. Airbnb, VRBO, etc)?

Yes. The only exclusions are non-profit models, Government entities/local authorities, large hotel providers, and quoted companies.

I am not resident in the UK – does this affect me?

Yes. Income earned in the UK by all owners, regardless of where they live, must be reported to HMRC. It’s essential to ensure that all the necessary information has been provided to us, including any international tax identification numbers.

I have been an owner with kate & toms for several years, when will you be reporting my income information to HMRC?

As you were contracted with us prior to 1st January 2024, you will fall within the scope of the 12-month transitionary period. This means your first reporting period will be the 2025 calendar year, which we will need to submit to HMRC by 31 January 2026.

I am a new owner with kate & toms, when will you be reporting my income information to HMRC?

If you contracted with kate & toms after 1st January 2024, the 2024 calendar year will be your first reporting period. We must report your information to HMRC no later than 31 January 2025.

How will you gather any missing information from me?

We will be in touch soon to ask you to complete a secure form to capture any missing data.

There are multiple owners of my short term let. Do we need to do anything differently?

In this instance, we will report on the registered owner or owners. We will report the total amount paid for each individual, as we cannot disaggregate the total amount to show individual shares of the income.

Will I be able to see the information kate & toms report to HMRC?

Yes, we must inform you what has been reported to HMRC

Can I report my income to HMRC independently to avoid platform errors?

While Kate & toms are required to report your income, you are still responsible for your own tax return. You should include all income from your property or properties in your tax return, regardless of platform reporting.

I am VAT registered – how does this affect me?

We must report the net amount paid, which will include an element of VAT.

Although not yet communicated by HMRC, the guidance does comment that we must report all known tax numbers, which we anticipate will include your VAT registration number so HMRC can identify those reported amounts that will include an element of VAT.

What happens if an owner does not cooperate with their platform?

HMRC guidance advises suspension of listings and withholding of funds if an owner is uncooperative. All platforms are expected to meet the deadlines outlined in the timescales above, submitting accurate information for all relevant short term let owners. Failure to do so will result in penalties for the platform.

We hope not to be in this situation and will work with owners to avoid any unnecessary penalties.