In recent months, Airbnb has handed over data regarding user activity to HMRC, who, in turn, has begun contacting Airbnb hosts, requesting they file any undeclared earnings from the home-sharing site.
Some reports assert that 19,000 Airbnb hosts have received letters from HMRC, alerting them that the Revenue is aware of their activity on Airbnb. Such letters will surprise many – with a misconception pervading that income from online sharing and trading sites such as Airbnb is not taxable. And, as reports state that HMRC intends to collect taxes from as far back as the tax year 2017-18, this news will be a cause of worry for many.
As a taxable secondary income source, there is no escape from the fact that any tax owed must be paid. However, there may be some relief for Airbnb hosts, with HMRC seemingly waiving penalties for undeclared income over the last five years for those hosts who respond promptly to their nudge letter.
David Herd, group director at Champion Accountants, says: “If you’re in this situation, my advice is to tackle this news head-on. The worst thing you can do is ignore the issue and let HMRC come to you, so getting ahead will put you in a much stronger position when it comes to penalties for taxpayer behaviour. I also advise seeking advice from a reputable accountant to assist with a disclosure, as there are various reliefs to consider before filing your tax return. The value of any profit from Airbnb or other rental property will all come into play.”
Champion’s new expert property accountant service assists those who profit from property in navigating the increasingly complex sector. Designed for private landlords and rental property owners, including holiday lets and property investors, our property accountants keep you legal. With your financial needs covered, we’ll also guide you through legislative changes, helping you understand how legal updates affect your assets and advising on your best options.
For more information or to speak to us about your needs, call 0161 703 2500 or email david.herd@championgroup.co.uk.
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