IEIM902430 - Verifying Unreliable Information

Where a Reporting Platform Operator (RPO) has doubts about the reliability of the information it has collected, it will need to consider what next steps to take to verify that information to ensure it is correct. HMRC cannot prescribe what these next steps must be, as they will depend on the circumstances of the Seller in question, the RPO’s business model, the information the RPO already holds, and the cause and the level of doubt with regard to the reliability of the information.

Next steps that RPOs may take where they have doubts as to the reliability of information could include:

  • Asking the Seller to re-confirm the information provided, to ensure there are no mistakes.
  • Contacting the Seller to discuss the reason for the doubt and seeking an explanation from the Seller to address the concern.
  • Collecting additional documentation from the Seller to allow verification. For example, if the RPO in question doesn’t normally collect identity documents during onboarding, but has doubts about a Seller’s name or date of birth, it could request relevant ID such as a passport or driving licence, or a copy thereof.
  • Checking a Seller’s name with financial information, identification documentation, email details or other information that the RPO has available in its records.
  • Checking transactional records to confirm the Seller’s primary address or the jurisdiction that issued the TIN in cases where activities are performed in a Seller’s home or in a particular place. An individual Seller’s primary address could be further verified by requesting a copy of a recent utility bill, bank statement or other similar document.
  • Using publicly available information. For example, where there is doubt as to an entity’s primary address, the Seller could find out the registered office from Companies House in the UK or equivalent registries overseas where available.
  • Using publicly available automatic checking tools or apps to confirm the correct format or structure of a TIN.
  • Using software to verify the Seller’s identity, as is currently used by some AML-obliged persons.

The above list is not exhaustive or prescriptive, and RPOs are free to take such other measures as they deem appropriate in the circumstances.

Where the RPO is still unable to verify the information to its satisfaction, it may decide to consider other more severe actions including:

  • Temporarily suspending the Seller’s access to the Platform, until the RPO’s doubts as to the reliability of the information have been fully assuaged.
  • Terminating the Seller’s access to the Platform.

These are not mandatory actions and Platform Operators should decide what steps are reasonable depending on the circumstances. RPOs will have their own risk appetites and will accordingly need to determine their own procedures and actions to achieve sufficient confidence in the reliability of the information they have gathered, bearing in mind the possibility of penalties where the information reported is found to be incorrect.

Where the RPO has evidence of possibly illegal conduct, such as fraud, identity theft or money laundering offences, it should consider whether a report to the relevant authorities is appropriate.

From time to time, HMRC may provide RPOs with information indicating that some of the information collected by the RPO on one or more of its Sellers is, or may be, inaccurate. This could occur as part of HMRC’s compliance activities to ensure RPOs are complying with the rules, as a result of HMRC compliance activity in relation to specific Sellers, or as a result of information obtained from other sources, including tax authorities in partner jurisdictions or third-party data.

Where HMRC provides the RPO with such information, the RPO must re-verify the information provided, using reliable, independent documentation and data. Depending on the data fields that are potentially incorrect, this could include official, government issued photo ID such as a passport, National ID Card or driving licence, utility bills, company registration data in the case of an Entity Seller, or documentation from the relevant tax authority in the case of a TIN.