By using this website, you agree to our use of cookies to enhance your experience.
Graham Awards


Airbnb landlords beware - HMRC may be investigating you

An accountancy firm is warning Airbnb landlords they may be investigated following a decision by the short lets platform to share data with HM Revenue & Customs.

The Grunberg & Co accountancy practice says that in reporting its tax affairs to HMRC - in the shape of its accounts to December 31 last year - Airbnb has also agreed to share data for the two preceding tax years. 

Alexander Kossoff, a partner at Grunberg, says so-called ‘hosts’ for Airbnb may wish to ensure their tax affairs are in order as a voluntary disclosure to HMRC could help to reduce any potential fines.


“According to previous reports from Airbnb, it estimates that the average annual earnings for a typical host are just over £3,000” says Kossoff.

“Where someone uses the service to let part of the home that they live in they may be able to take advantage of the Rent-a-Room relief allowance of £7,500, which means they do not generate a tax reporting obligation below this amount.

“However, those hosts that rent out a second or third home, rather than part of their main home, cannot benefit from this same relief.”

He adds that any amount over the allowances would, in most cases, result in a tax reporting obligation via a person’s annual Self-Assessment tax return.

And he warns: “Airbnb’s decision to share income data with HMRC could lead to a rise of investigations against hosts if the tax authority feels that tax is outstanding. Hosts and landlords should, therefore, consider making a disclosure and payment to HMRC for any outstanding tax that is due.”

Those taxpayers who have already submitted a tax return for 2018/19 should be able to amend it before January 31 next year.


However, where a person has omitted some or all of their residential property income for earlier tax years, they should consider disclosing information under HMRC’s Let Property Campaign or where property is located overseas, via the Worldwide Disclosure Facility.

“By making a voluntary disclosure to HMRC, a taxpayer can reduce a potential fine or a costly investigation. In some cases, where they act quickly enough, they may only be required to pay the outstanding tax amount” he concludes.

“With the ever-changing rules around property tax, it is certainly worth reviewing your property income to ensure that you are not only paying the right amount of tax but also to check that there aren’t reliefs or allowances that could help to reduce the charge that is due.”

Want to comment on this story? If so...if any post is considered to victimise, harass, degrade or intimidate an individual or group of individuals on any basis, then the post may be deleted and the individual immediately banned from posting in future.

  • icon

    Good! I've never understood why they get £7500 per annum tax free while landlords providing homes get taxed on turnover.


    They??? The £7500 per anum tax relief is for 'rent a room' in your own home - not necessarily anything to do with Airbnb.


    Yes - but lots of them use Airbnb.

  • icon
    • 09 October 2020 16:02 PM

    There is currently no restriction on how many lodgers in a tax year a LL may have.

    A lodger agreement could be for one day.

    Perhaps to prevent holiday bookings moving to sites like spareroom there should be a minimum 1 month lodger occupation period.

    But how would you police it!?

    It is clear the RFRA scheme is being abused by AirBnB.

    The tax break was meant for long term occupation by lodgers as a cheaper or more flexible alternative than a tenancy.

    There are reckoned to be about 10 million sparerooms not being utilised currently.
    Govt hopes the tax break houses long term occupation.
    It is not meant for holiday occupation.

    With the current abuses Govt may have to redesign the RFRA scheme in an attempt to reduce such abuses.
    Not sure how this could be effectively achieved.


    Totally agree. Airbnb users letting rooms short term and tax free are a scourge in many residential areas. It has destroyed the enjoyment of hard earned properties for many Edinburgh residents and probably in other cities as well.

  • George Dawes

    I had one of these HMRC investigations a few years ago , all bluster and twaddle

    Basically an excuse for the inspectors to do a bit of shopping in London , on expenses no doubt .. I bumped into one getting out of a taxi holding some John Lewis bags..his reaction said it all . I should have reported him tbh...

    Then again air bnb is a total nuisance and the sooner it's eradicated the better imo

    • 10 October 2020 07:58 AM

    Short term holiday lettings could easily transfer to spareroom.co.uk or other short term letting sites although spareroom does all types of letting.
    If the AirBnB platform isn't used then lettings cannot be detected.

    Spareroom is not going to notify Councils of every letting that occurs.

    They don't even know whether a listing results in a successful letting.
    Tourists will just avoid the AirBnB site abd use spareroom



    In that case, HMRC will (eventually) turn their attention to spare room. I know that they do occasionally focus on small local holiday letting agents where there are lots of holiday lets and flex their muscles. I enjoyed witnessing this happen in a popular Open Golf venue a few years ago, with a healthy six or probably seven figure sum extracted from many home owners cashing in on five figure rentals from golfers and spectators.

  • icon
    • 10 October 2020 11:58 AM

    Can't see how that will assist HMRC.
    Though I guess they can check that the RFRA is only being used on one property.
    But difficult to ascertain how many lodgers and how long they stayed.
    I guess RTR regulations might catch out LL as they must be complied with and it would be reasonable for the HO to see the RTR data for each lodger.

    Very few tourists would qualify for the RTR!!

    Of course there would need to be data sharing between the HO and HMRC.

    Can't see that ever happening!

    But I suppose the threat of large fines etc for failing to comply with RTR regulations would deter a lot of AirBnB LL from trying to swerve the AirBnB platform.

    But again there is really no way of detecting when lodgers occupy a property and for how long.

    I believe HMRC needs to data share with lenders as they usually only allow 2 lodgers but not as AirBnB lettings.
    LL would be risking their mortgage being called in if their lender was made aware that they are engaging in AirBnB type lettings most resi lenders would not give CTL to.

    They don't mind normal lodgers.
    But it is easy to see how lodger LL could evade policing.

    Which is why I reckon eventually lodger LL will be subject to additional regulations to establish the veracity of those letting.

    I believe lodgers are how many illegal immigrants remain hidden.

    But I also believe all lodger income should be tax free but would accept that HMRC etc would require complete transparency as regards lodger occupation.

    That wouldn't be unreasonable.
    But I simply can't see any of these things happening in the lodger sector.

    AirBnB will only be detected by neighbours reporting to Councils etc.


Please login to comment

MovePal MovePal MovePal
sign up