DAC7: what every short-term rental business needs to know
- Oct 30, 2025
- 2 min read
The Model Reporting Rules for Digital Platforms in the Gig and Sharing Economy is a bit of a mouthful, so for the purposes of this article, we'll stick with the much simpler 'DAC7' (writes Natalie Dowling, Head of Tax Platform, Hartford Consulting).
If you run a short-term rental platform, DAC7 is officially on your radar. After going live in the UK on 1 January 2024, these regulations are all about giving tax authorities visibility over gig economy income – such as Airbnb bookings, vehicle rentals, freelance services, and more – that previously went under the radar.
Who’s in DAC7 scope?
Platform operators: any online business connecting sellers to users via a website or app.
Sellers: anyone that is not directly employed by your platform earning income through:
Sale of goods: e.g. online marketplaces like eBay, Etsy, Vinted.
Transportation rental: e.g. cars, bikes, boats, scooters (without a driver).
Personal services: e.g. ride shares, delivery drivers, tutors, gardeners, hairdressers, etc.
Rental of immoveable property: e.g. holiday lets, parking spaces, storage units, static caravans.
Only “sale of goods” has a minimum reporting threshold (30 sales/£1,700 in a year) – all other activities need to be reported from £1 of income paid.
Sole traders are exempt from this, as are property listing sites that do not take bookings and just redirect to the platform/person that does take the booking.
What needs to be reported
Due diligence data: names, addresses, tax ID numbers (national insurance numbers for UK individuals), bank details, property details.
Booking/payment info: income per quarter, deductions for fees/commissions/taxes, number of bookings, nights rented.
Reporting format: annual submission via HMRC’s digital platforms portal in XML.
Owner statements: sellers must receive a copy of the information reported about them.
DAC7 penalties can be severe
Non-compliance can be costly:
Up to £5,000 flat fines + £600 per day for late or missing submissions.
£100 per seller for not performing due diligence or incomplete or inaccurate reports.
£1,000 for failing to register your platform.
£5,000 for not keeping required records.
A platform ignoring DAC7 could face tens of thousands of pounds in fines quickly – so don’t bury your head in the sand.
The first steps to compliance
Find out if you’re in scope, and if you are:
Register with HMRC ASAP.
Map your business model – include non-UK properties and other services.
Catch up on missed 2024 reporting.
Document policy and procedures for data collection, validation, reporting, and record-keeping.
Start collecting owner data now – don’t wait until December.
With structured onboarding, updated privacy notices, and proper record-keeping, even small platforms can stay compliant. Think of DAC7 as a compliance checklist that protects you – and your business – from costly fines.
Contact Natalie Dowling at Hartford Consultants for a free 15-minute chat about whether you are in scope and what you need to do to get up to scratch:
Comments