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October 14, 2020
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HMRC Now Receiving Details of Lettings From Airbnb

With the offer of quality accommodation at a cheap price and a convenient online booking system, Airbnb has become a very popular choice for those looking for somewhere to stay during a weekend away or even an extended holiday. The increased popularity of the site has created a great opportunity for those with an apartment or spare room to easily generate some extra income.

However, these people may not have earned money in this way before and they may therefore not be aware that this is taxable rental income that they may need to report to HMRC.

Airbnb has just announced that it will provide HMRC with the details of the individuals who let out property on the site and the rental income that they have received. The information provided will relate to the 2017/18 and 2018/19 tax years.

Therefore, it is extremely important that individuals who are letting out properties or rooms on the site are aware of the rules for reporting rental income to HMRC and fully understand whether they should be reporting their Airbnb income on a UK self-assessment tax return.

Broadly speaking, an individual would not need to report the income on a tax return if:

  • Rent a Room Relief applies – If an individual is renting out a room in their only/main residence and their total annual rent received is less than £7,500.
  • Their total rental income is below £1,000 - In this case, the property allowance of £1,000 can be claimed and none of their income is taxable.
  • Their total income for the year (including employment income, taxable rental income and savings and dividend income above their available allowances) is within their Personal Allowance (£12,500 for the 2020/21 tax year).

However, the rules in relation to the above points can be quite tricky to understand. Therefore, we would recommend that if you are unsure about your tax position in relation to your rental income you should seek professional advice.

Similarly, if you know that you should have reported income from Airbnb in 2017/18 and 2018/19 but did not do so, we would recommend contacting HMRC with the details of the income that you received. This is because any penalties that may be imposed by HMRC could be reduced if you disclose your income without being prompted to do so.

Please contact a member of our team if you require any help in relation to the points raised in this article or would simply like to have a chat about your circumstances and receive assurance that you are meeting your tax compliance obligations.

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