Hosts who rent out a spare room could soon see themselves being straddled with an unexpected tax bill if companies like ‘Airbnb’ are forced to share data with UK authorities.
Airbnb, the website that allows you to list, find or rent a room in a private residence, has announced that it now has to share details of its users’ rental profits with the tax authorities in Ireland. Airbnb was already required to share this information in America but, until now, has not been required to do so in the UK. However, HMRC are cracking down on unpaid tax from hidden income and this may result in companies like Airbnb soon having to share details of income earned by its UK customers.
Airbnb, which has headquarters in Ireland and America, say they are not currently governed by the same legalities in the UK and so will not be reporting income automatically in the UK but, as part of its crack-down on unpaid taxes, HMRC has said it will be approaching intermediaries like Airbnb for data on their clients.
At present homeowners who rent out a room are able to earn £4,250 from the endeavour without paying tax. This will rise to £7,500 from April 2016 but higher earners need to be particularly careful if their extra rental income is likely to take them into the higher rate tax bracket.
Professional tax advice & accounting for landlords
For more information, help and advice with the above, or for all other tax-related enquiries, contact Taxfile who are particularly knowledgeable about rental and landlord issues pertaining to tax. Contact Taxfile here, call them on 0208 761 8000 or pop in to speak with a tax adviser at their Tulse Hill Office in South London, SE21. Alternatively you can book an appointment with them online, here.