Attention Airbnb landlords!!!!

6 October 2020
airbnb how to declare rental income

Airbnb (UK) have published their accounts for the year ended 31st December 2019. Worryingly it has stated that it will share data with HMRC about the earnings of hosts (those who let out property) on its UK platform in the years 2017/18 and 2018/19, Reuters reported.

Whilst this isn’t a surprise as HMRC have been using their Connect data analysis system to join the dots and discover all sorts of data concerning property income and other gains, it is unusual to see confirmation like this.

This data will allow HMRC to launch enquiries into the tax affairs of individuals who have not declared this income. Once the information has been validated HMRC could open up an enquiry going back 20 years using the discovery provisions. Therefore to avoid any penalties we would suggest if you have not declared any income from Airbnb in these years you let us know immediately so that we can rectify the situation.

BnB room

 

HOW TO DECLARE:

If the landlord hasn’t declared their rental income, and it is not covered by rent-a-room relief or the miscellaneous trading income allowance, this situation should be swiftly corrected.

Where the taxpayer has submitted a tax return, and it is still in date for amendment, it should be amended without delay. The 2018/19 tax return can be amended by the taxpayer until 31 January 2021.

Where the omitted property income or gain relates to earlier tax years the taxpayer should consider disclosing under HMRC’s let property campaign.

This disclosure service has been running for over seven years, but it is only open to individuals who let UK residential property. It can’t be used to declare income from non-residential property or where the property has been let through a company or trust. Where the let property is located overseas the worldwide disclosure facility should be used.

The advantage in using the let property campaign to disclose is that the penalties charged for non-disclosure will be much lower than if the taxpayer waits for HMRC to contact them. If full disclosure and payment of the tax is made before HMRC spots there is a problem, the penalty can be reduced to nil.

It is therefore important that we rectify this situation before HMRC “discover” the anomaly.

HMRC- How to declare rental income

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