Airbnb has seen phenomenal growth since launching around the world. Amongst a lot of regular hotel users, it’s become a go to site to check for cheaper accommodation. And anyone can register to let part or all of their home for 1 night or more.
This has led to a lot more landlords.
But what are the tax implications?
Any income earned from Airbnb is taxable income. And, if the income is high enough, must be declared to HMRC. This year that limit is £4,250 (£2,125 each if it’s a joint let). From April 2016, that limit is rising to £7,500 (£3,750 for a joint let)
If you earn less than this, you don’t need to do anything. If you earn more, you must register for a tax return.
Will HMRC find out if I don’t declare?
HMRC have used a power called Section 36 to demand customer information from companies such as Ebay and Amazon. They then cross check the information against their self-assessment database to see who hasn’t declared the income on a tax return.
Demands for tax returns follow, with interest, penalties and surcharges added and increased as HMRC have discovered the error.
According to Landlord Zone US & Irish tax authorities have demanded similar information from Airbnb. It seems only a matter of time that HMRC use Section 36 to demand the information Airbnb says it won’t give.
You protect yourself now.
If you’re earning more than £4,250, or £7,500 from next year, then contact us now to help you in the sometimes complicated process.