Millions of people earning money through side hustles and online platforms have been warned over a “quiet” tax reporting change that is now giving HMRC far greater visibility of their income.
From January 2026, digital platforms such as Airbnb, Vinted and other online marketplaces have begun sharing detailed earnings data directly with HMRC under new international reporting requirements designed to clamp down on undeclared income.
The change follows the introduction of the OECD’s Model Reporting Rules, under which digital platforms were first required during 2025 to collect detailed seller information.
That data is now being automatically transmitted to tax authorities and matched against individuals’ self-assessment tax returns.
The rules cover a wide range of activities, including short-term property lets, online resale of goods, taxi and courier work, and freelance services carried out through digital marketplaces.
Platforms are required to report key personal and financial details, including the seller’s name, address and date of birth, National Insurance number or tax identification, total income earned through the platform, and the number of transactions completed.
Tax experts say the shift represents a significant tightening of enforcement in the so-called “platform economy”, where millions of people supplement their income through informal or semi-formal trading activity.
Seb Maley, chief executive of tax insurance provider Qdos, said many workers may not yet have grasped the scale of the change or its potential implications.
He said HMRC now has “far greater visibility” of online earnings than ever before, reducing the scope for underreporting and increasing the likelihood that discrepancies will be identified.
Maley said: “This is a major shift in how HMRC monitors income, and could easily catch a lot of freelancers and people with side hustles off guard. For years, there’s been a perception at HMRC that smaller or occasional earnings through platforms might go under the radar, but that’s no longer the case.
“As of this year, HMRC now receives data directly from the platforms themselves, which makes it much easier to spot discrepancies. If what you report via your self-assessment tax return doesn’t match what HMRC’s been told, it’s likely to raise a red flag.
“Whether you’re renting out a spare room, a holiday let, selling items online or earning extra income through freelance platforms, you need to make sure everything is accurately declared. Compliance is paramount – HMRC is increasingly data-led, and these reporting rules give them a powerful new tool. Anyone who isn’t compliant risks being investigated – and that can lead to penalties, interest, and a lot of unnecessary stress.”
The move is designed to improve tax transparency and ensure that income generated through digital platforms is properly declared and taxed in line with traditional forms of employment and self-employment.
However, it is likely to raise concern among part-time earners and casual sellers who may not have previously considered themselves to be operating within the scope of full tax reporting obligations.
The expansion of data-sharing marks a broader shift towards automated tax compliance, with HMRC increasingly relying on third-party reporting to cross-check declarations rather than manual investigation.
For those earning below the trading allowance, no tax is due. But once income thresholds are exceeded, individuals are required to register for self-assessment and report earnings in full.
With the new system now fully operational, advisers are warning that individuals with multiple small income streams could find themselves unexpectedly drawn into the tax system if their combined earnings are not properly recorded.
The changes come amid a wider tightening of tax compliance measures as HMRC seeks to close the so-called tax gap and ensure that income from newer forms of work is captured more effectively.
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