Airbnb UK accounts for the year to 31 December 2019 include a statement that it will share data with HMRC about UK property income for the years 2017/18 and 2018/19 Reuters has reported.
This may come as a surprise, but HMRC has been gathering information from sources outside of tax returns for some time, as they have with Let-Property-Campaign which gathers data from the tenancy deposit scheme to identify properties rented out and cross-references with taxation.
“We are committed to working in partnership with governments... and we will continue to work collaboratively with HMRC,” Airbnb said.
Airbnb data will allow HMRC to launch targeted enquiries into the tax affairs of individuals
who have not declared their lettings income for 2017/18 and 2018/19. The deadline for opening an enquiry into a self-assessment return for 2018/19 would be 31 January 2021, if the return were issued and submitted on time.
The discovery rules also allow HMRC to go back up to 20 years in some cases. Airbnb's data will constitute a discovery for HMRC’s purposes, so up to 20 years will be legally available.
HMRC is reported as saying it will address any issues over the landlords’ payment of tax in 2021/22. This clearly indicates that HMRC expects to use its discovery powers to open up tax enquiries.
If the rental is your main home the annual allowance for Rent-a-Room-Relief is currently £7500 (as of Nov 2020), and the Airbnb insight report for 2017/18 says the annual earnings from Airbnb only in the UK averages only £3,100. This is well under £7500, and you do not need to declare the income on a tax return if it is under £7500.
You can use the Rent-a-Room-Relief if:
you let a furnished room to a lodger
your letting activity amounts to a trade, for example, if you:
run a guest house
run a bed and breakfast business
provide services, such as meals and cleaning
However, if it isn't your main residence, the tax reporting obligation is £1,000.
The 2018/19 tax return can be amended by the taxpayer until 31 January 2021.
If 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 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.
If you make a self-disclose the penalties charged will be much lower than if you wait for HMRC to contact you, and if full disclosure and payment of the tax is made before HMRC spots there is a problem, the penalty can be reduced to nil.
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