Airbnb is to share data with the taxman on its hosts’ earnings going as far back as the 2017-18 financial year, a new warning on its website reveals.
The information will help HMRC identify those making money from letting their properties without declaring it, who then face criminal prosecution and tough penalties of up to 30% of the tax owed.
The Treasury has previously said that more than half of people using ‘sharing sites’ did not think they had to pay tax on this income.
However, anyone renting properties on Airbnb can only make up to £1,000 a year before tax, which is protected by the ‘trading allowance’ while any profits above this threshold must be declared.
Taxpayers who have not disclosed their income are being encouraged to do so via HMRC’s longstanding Let Property Campaign, which would reduce the penalty.
Tax investigation
Richard Morley, a partner at accountancy firm HW Fisher, told The Telegraph that if HMRC obtains evidence that tax has been unpaid in a previous year, the tax authority can open an investigation to obtain information going back up to 20 years under so-called ‘discovery laws’.
An HMRC spokesman says: “This is routine activity – each year we send out thousands of reminder letters on various areas of tax. We believe our customers want to pay the right amount of tax and by working with online rental platforms, as well as issuing these reminders, we’re taking steps to help make it as easy as possible for people to get their tax right.”
Holiday home owners will be forced to obtain planning permission to let their properties under government plans expected to come into force later this year. The government is also holding a further consultation on a new registration scheme for short-term lets.
Read the LandlordZONE Forum discussion on the subject.
Read the Airbnb warning in full.
