In the last few years, the popularity of platforms such as Airbnb has grown exponentially with users having the opportunity to let out their properties for a short or medium term. However, in a strategy to halt landlords not paying taxes, HMRC are using data transmitted by Airbnb to find people using the platform who may not have declared their rental income.
HMRC using AirBnB data
Since 2020, Airbnb have been compelled to share data with HMRC and provide information such as earnings from the hosts on the platform. Information can go back to the 2017/2018 financial year in the UK. In 2023, it is believed the tax office has sent out over 800 letters to potential hosts who may have paid insufficient tax.
Following previous inquiries into the situation, Treasury estimates 50% of owners were unaware of their obligation to pay taxes on the rental income they receive via the use of these type of platforms. Furthermore, HMRC is also targeting hosts and property owners on various online rental platforms such as Booking.com, HomeAway and TripAdvisor.
Consequences and Penalties
HMRC are also targeting landlords who receive income from their properties in foreign countries. For example, since January 2020, every digital platform that operates in France has been required to report information including income earned and the number of transactions to the national tax authorities.
If you fail to report your income from Airbnb, then you may face penalties depending on your behaviour and whether or not you deliberately concealed information to avoid paying tax on your rental income. Depending on your situation, the penalty can go vary from nothing to 100% of the tax due you failed to declare.
We can help you clarify your situation and avoid any nasty surprises, contact us straight away.
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