TAXING MATTERS


NEW REPORTING RULES FOR DIGITAL PLATFORMS IN TRANSPORT INDUSTRY: WHAT YOU NEED TO KNOW


Article by Gary Jacobs CEO Eazitax 020 8529 2600 www.eazitax.co.uk


Starting January 2025, new reporting rules will take effect for digital platforms in the passenger transport industry. These rules aim to make sure everyone is paying the right amount of tax and to bring more transparency to the growing gig economy. If you're a digital platform operator, a driver, or a passenger using these services, here's what you need to know about the changes and how they will affect you.


What are these new rules about?


The new rules require digital platforms, such as ride- hailing apps and taxi-booking services, to report detailed information about the trips and payments that happen on their platforms. The goal is to make it easier for tax authorities to keep track of income earned through these services and ensure that taxes are paid correctly.


Under these rules, platforms must provide specific information about the drivers who use their services, the trips they complete and the payments they receive. This information will be shared with tax authorities in the countries where the services are provided.


Who do these rules apply to?


These rules are aimed at digital platforms that connect passengers with drivers. This includes: l


Ride-hailing services like Uber, Lyft, and Bolt. l Apps or websites for booking taxis. l


Services for luxury or specialised transport, like limousines or chauffeur services.


While the platforms are responsible for reporting, the rules also affect drivers and service providers. The income drivers earn will now be reported directly to tax authorities, so it’s important for drivers to be prepared.


What information will be reported?


Platforms will need to report: 1. Driver information: name, address, tax identification number (TIN), and payment details.


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2. Trip details: how many trips were completed, when and where they happened, and the distance travelled.


3. Payment data: the total amount drivers earned, including fares and tips, plus details of any commissions or fees charged by the platform.


If drivers work across borders or provide services in multiple countries, the information will also be shared with tax authorities in those countries.


Why are these rules being introduced?


The passenger transport industry has grown rapidly thanks to digital platforms, but this growth has created some challenges: l


l l


Missed taxes: many drivers don’t report all their earnings, which means government loses tax revenue.


Fairness: drivers and businesses that pay their taxes are at a disadvantage compared to those who don’t.


Transparency: tax authorities need better tools to track income from the gig economy.


These rules aim to solve these problems by making it harder to under-report income and ensuring everyone is treated fairly.


How will this impact digital platforms?


Digital platforms will need to make changes to comply with the new rules. For example: 1. Collecting information: platforms will need to gather accurate details from their drivers, including tax identification numbers.


2. Updating systems: many platforms will need to upgrade their systems to track and report the required data.


These changes may require significant time and investment, but they are necessary to meet the new legal requirements.


What does this mean for drivers?


If you’re a driver, the new rules mean the income you earn through a platform will now be automatically reported to tax authorities. This has a few key implications: l


DECEMBER 2024 PHTM


Transparency: tax authorities will know how much you earn, so it’s important to report your income correctly.


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