Airbnb hosts and landlords should make sure their tax affairs are ship-shape to avoid any potential fines, warns a leading accountancy firm.
It follows the lettings platform’s decision to share details about its hosts’ income from 2017/18 and 2018/19 with HMRC, which Grunberg & Co says could lead to a rise in investigations.
Airbnb has faced pressure worldwide to check that its hosts pay the appropriate taxes and partner Alexander Kossoff is encouraging those in the UK to consider making a disclosure and payment to HMRC for any outstanding tax.
£3,000 a year
According to Airbnb, the average annual earnings for a typical host are just over £3,000 but Kossoff (pictured, below) explains that those hosts who rent out a second or third home, rather than part of their main home, can’t benefit from the Rent-a-Room relief allowance of £7,500.
He says: “In many cases no tax may be due, but that where it is, a voluntary disclosure to HMRC could help to reduce any potential fines from the tax authority.”
Anyone who has left out some or all of their residential property income for earlier tax years should consider disclosing information under HMRC’s Let Property Campaign or where property is located overseas, via the Worldwide Disclosure Facility, he advises.
“In some cases, where they act quickly enough, they may only be required to pay the outstanding tax amount.”
HMRC recently hit Airbnb UK with an extra £1.8 million tax bill last year to add to the £1m it had already paid.