Developments in technology have transformed the way people offer services and sell products - thanks to the co-called sharing economy. But,  as is a common theme in today's tech environment,  this also presents challenges in areas like tax - where we now have to interpret decades old tax legislation and case law in the light of evolving business models and changing demographics.

The platforms themselves need to grapple with evolving rules about what constitutes an employee versus a contractor and the relevant compliance activities which go with those categories, and there are wide variations on this across theEU.  

Online sharing retailers may find themselves with multiple EU VAT registrations as a result of the distance selling rules or trying to figure out Customs classification charts. Peer to peer financial platforms need to work their way through regulatory requirements and all businesses need to worry about cybersecurity and the impact of where and how they hold client, customer and supplier information.

For those who supply their goods or services through such platforms, there is movement by the Government to recognise this as a growing class of income.  In the 2006 Budget the Chancellor announced the introduction of two new £1,000 allowances for "micro-entrepreneurs", a relief that helps to ease the tax worries any worries of individuals dipping their toe into the sharing economy.  

But as the level of transactions grow this raises important questions about how the Government captures  the data and deals with the implications.  Guidance around when an individual is "trading" or not which determines an individual's liability to tax can be hard to interpret, even for an accountant, and the onus is on individuals to determine when the need to file a tax return.

If as a society we are moving away from the traditional 9 to 5 PAYE employment to multiple portfolio activities then our system needs to reflect this - it will be interesting to see how the players in this space and the authorities take the lead on developing this.