From 1 January 2024, digital platforms operating in the UK — including Amazon, eBay, Etsy, Vinted, Airbnb, Booking.com, Just Eat, Uber, Fiverr, TaskRabbit, and dozens of others — have been required to report the annual income of every UK seller or service provider on their platform directly to HMRC. This obligation arises from the OECD's Model Rules for Reporting by Digital Platform Operators, implemented in the UK as the DAC7 regime.
The first full annual data cycle covered the 2024 calendar year and was reported to HMRC in January 2025. HMRC then held this data while the 2024/25 Self Assessment returns were filed by 31 January 2026. Since then, HMRC's Connect system has been running automated matching — comparing the platform income reported by each operator against the income declared by each taxpayer on their Self Assessment return.
Where those figures do not reconcile, a nudge letter or compliance check follows. Those letters are arriving now.
Which Platforms Are Reporting
The DAC7 reporting obligation applies to any digital platform that facilitates the sale of goods, the provision of services, the rental of property, or the rental of means of transport, where the platform connects buyers and sellers and either collects or facilitates payment.
In practice this covers an enormous range of activity. eBay and Vinted report income from selling goods. Airbnb and Booking.com report property rental income. Uber, Bolt, and Ola report driving income. Just Eat, Deliveroo, and Uber Eats report food delivery earnings. Fiverr, Upwork, and PeoplePerHour report freelance service income. Etsy and Amazon Marketplace report handmade and retail goods income.
The reporting threshold that applies in most cases is 30 transactions or €2,000 (approximately £1,700) of gross proceeds in a calendar year before the platform is required to report a seller to HMRC. Sellers below this threshold are not reported. But most people with meaningful platform income are well above it.
Not Everyone Has a Tax Problem
This is important context before the anxiety sets in. HMRC is not treating all platform income as taxable by default. Whether your platform earnings create a tax liability depends on the nature and level of your activity.
Selling unwanted personal possessions — second-hand clothes, furniture, old books, electronics you no longer use — is generally not taxable. You are realising the value of assets you already owned. Capital Gains Tax could theoretically apply to items worth more than £6,000, but for the vast majority of casual second-hand sales, there is no liability.
The situation changes when the activity becomes trading. Buying goods to resell, making goods to sell, regularly sourcing and flipping items for profit, or providing services through platforms on a commercial basis are all treated as self-employment income and are subject to Income Tax and National Insurance in the normal way.
The tax system does not depend on whether you consider yourself a "business." It depends on the facts of what you are doing. A person who regularly buys trainers to resell on eBay is trading, whether or not they think of themselves as a trader.
The £1,000 Trading Allowance
Every individual has a £1,000 trading allowance each tax year. If your total income from self-employed trading activities — including all platforms combined — is £1,000 or less, it is entirely exempt from Income Tax and you do not need to declare it.
If your platform income exceeds £1,000, you have two options. You can claim the full £1,000 trading allowance and pay tax on the excess above that. Or you can deduct your actual allowable expenses instead and pay tax on the net profit — which is the better option if your costs are higher than £1,000.
The trading allowance applies to trading income only, not property income. Short-term letting income — Airbnb and similar — has its own separate rent-a-room relief and property income allowance rules. If you rent out a room in your own home through Airbnb, the rent-a-room scheme may exempt the first £7,500 per year of income from tax. If you rent out a separate property, the £1,000 property income allowance may apply at lower income levels, but the main property rules — including the Section 24 mortgage interest restriction — apply above that.
The Most Common Situations HMRC Is Flagging
Based on what CoreAcc Accountants is seeing in practice in August 2026, the compliance activity triggered by the DAC7 data is concentrating in several specific patterns.
The most common is the casual reseller who has crossed from occasional to regular — someone who started selling surplus items but has progressively moved into buying stock to resell, without ever registering for Self Assessment because they did not think of themselves as a trader.
The second is the Airbnb host who has been letting a property but has not declared the income, or has declared it but has applied the rent-a-room relief incorrectly — claiming it for a property they do not live in, for example.
The third is the gig economy worker — delivery driver, private hire driver, or task-based service provider — who has underreported platform earnings or claimed expenses that do not exist to reduce the apparent profit.
In all cases, the nudge letter HMRC sends is an invitation to come forward and correct the position voluntarily. It is not a formal investigation. Responding honestly and promptly, with a corrected return or a voluntary disclosure, results in significantly lower penalties than waiting for HMRC to escalate.
What the Penalty Looks like If HMRC Finds You First
HMRC's penalty regime for undeclared income distinguishes between careless errors and deliberate concealment, and between voluntary disclosure (before HMRC contacts you) and prompted disclosure (after HMRC makes contact).
For a careless error — where someone genuinely did not know their platform income was taxable — a voluntary unprompted disclosure can result in a zero penalty, with only the unpaid tax and interest to settle. Once HMRC makes contact, the minimum penalty for a careless error rises to 15% of the unpaid tax. For deliberate concealment, penalties can reach 100% of the tax owed.
For a sole trader who has been earning £15,000 per year from online selling for three years without declaring it, the total exposure across tax, NI, interest, and penalties can easily reach £15,000 to £20,000 even at the lowest penalty rates. The sooner the position is regularised, the less it costs.
What to Do If You Think You May Have Undeclared Platform Income
Start by checking whether your platform earnings for 2024/25 exceeded the relevant thresholds — £1,000 for trading income, £1,000 for property income (as separate allowances). If they did, and you did not include that income on your 2024/25 Self Assessment return, you may need to submit an amended return.
If you have multiple years of undeclared income, a more structured voluntary disclosure may be the right approach. HMRC has specific campaigns and disclosure facilities for different income types — the Let Property Campaign for undeclared rental income, and the Self Assessment registration process for unregistered traders.
CoreAcc Accountants can review your platform income history, calculate any liability, and manage the disclosure process on your behalf — ensuring you pay what is genuinely owed, claim every allowance you are entitled to, and minimise penalties through a prompt and accurate disclosure.
If you have received a nudge letter from HMRC about platform income, do not ignore it and do not respond without taking advice first. Contact us today.
Have you received a letter from HMRC about platform income, or do you have earnings from online platforms that may not have been declared? Contact CoreAcc Accountants for a confidential review.
CoreAcc Accountants is an ACCA-accredited firm of Chartered Certified Accountants. This article was published on 17 August 2026 and reflects HMRC guidance in force at that date. It does not constitute legal or professional advice.
