It was recently announced that Airbnb has started to share information with HMRC about the incomes of over 225,000 individuals in the United Kingdom who rent out second homes and spare rooms ...
The information Airbnb sent to HMRC includes the names and details of people who register properties and rooms on their site as well as the total income received for both 2017-18 and 2018-19. This deal was struck after HMRC did a deal with them over their own tax bill.
Although the Airbnb data allows HMRC to target enquiries into the tax affairs of individuals not declaring lettings income from 2017/18 and 2018/19 it is possible that they could use legislated discover rules to go back many years before that.
A typical UK host received £3,100 which is within the rent-a-room relief allowance of £7,500, so there's no reporting obligation for hosts who let out part of their main home. However, if you let out entire properties that generate income higher than £1,000 in any tax year, then you have to report it.
If you have submitted your tax return for 2018/19 already, then it can be corrected right up until the 31st January 2021 deadline. If you owe tax from previous years, then get in touch with HMRC and disclose the additional income under their Let Property campaign. If the property is overseas, the Worldwide Disclosure facility should be used although it does incur higher penalties.
And if you declare your Airbnb income before HMRC notices the mistake, potentially any penalties can be reduced to zero.
If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.