Airbnb is a popular casual letting website for landlords wishing to let properties on short-term lets. All you have to do is create a listing for your property and it will be seen by millions of people all over the world. Lots of landlords use the website to advertise their properties, but some of them could soon be in for a nasty surprise in the form of an unexpected tax bill.
Letting Income Disclosure
Irish and U.S. tax authorities have forced Airbnb to disclose details of the letting income earned by people using their site and it looks like HMRC won’t be far behind. Many landlords don’t think income earned from casual lettings is tax deductible, but unfortunately this is not necessarily the case.
The UK arm of Airbnb has said it will not be sharing details of UK landlords, but experts think state of affairs won’t last long, as HMRC has the power to force the company to hand over relevant information.
Section 36 Legislation
Section 36 is a legal provision that allows HMRC to demand third parties hand over information if it suspects wide-scale tax evasion. HMRC have used Section 36 legislation to great effect before – Ebay and Amazon sellers are one of many groups of people successfully targeted for tax evasion this year.
Some landlords will be exempt under the new “Rent a Room” allowance of £7,500, but those who don’t fit the criteria or who have earned in excess of this amount, should think about seeking expert advice very soon.
