Airbnb hosts – even those using just a spare room for occasional letting – will be amongst those subject to new reports sent to HM Revenue and Customs.

From January 1 Airbnb and other short let platforms will be required to send data on their clients’ earnings to HMRC.

The rule will apply not just to short let platforms but other so-called freelance systems in the gig economy, such as those for freelance taxi service Uber and freelance online content service Fiverr.

HMRC will then use this information to identify taxpayers who may be under-reporting their income. If HMRC finds that a taxpayer has not reported all of their income, they may be subject to a penalty of up to 30 per cent of the tax owed – in addition to paying the outstanding tax itself – or ultimately prosecution.

The Revenue says an estimated £1.2 billion in tax is lost each year due to evasion in the gig economy.

Earlier this year Airbnb posted on its website a warning that it was sharing data with HMRC, going back as far as the 2017-18 tax year. 

However, anyone letting complete properties on Airbnb can only make up to £1,000 a year before tax, which is protected by the ‘trading allowance’ while any profits above this threshold must be declared. 

Those letting a room only via a short let platform or through some other system, and abiding by the rules of the government’s Rent A Room initiative, can earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation. This is halved if the person shares the income with a partner or someone else.