Therefore, just like any business, you are legally required to pay tax on the money you earn. You might have started your Airbnb as a bit of a hobby – a nice way to earn some extra money – but the reality is that being an Airbnb host is just like running a business. The restriction on rent-a-room relief has been described by some as the ‘Airbnb tax’, but for many the platform still offers its hosts the opportunity to benefit from valuable tax reliefs and could drive more entrepreneurial behaviour as they seek to operate more like a business. That’s an added extra which many guests want to avoid if they are looking to rent the entire property. However, from 6 April 2019 rent-a-room relief is only available where the host also lives in the property at some point during the rental period. Rent-a-room relief allows for gross income of up to £7,500 a year to be received on a property that is the individual’s main home and the legislation does not currently include any requirements for the landlord to be living in the home at the time.

For many, no income tax may have been paid on that income as a result of a relief targeted at lodgers called ‘rent-a-room’ relief. It’s always better to be pro-active with these things rather than risking tax penalties down the track – especially since there are tax benefits and tax-free allowances that can work to your advantage as a host.Īirbnb UK host. Many hosts have learnt the hard way when it comes to paying Airbnb income tax.

This article is an updated version of previous article – “ Airbnb / Short-stay holiday let tax: THE DEFINITIVE GUIDE” first published in Luxury BnB Magazine April 2020. Renting out your property when you’re not at home, also known as a Furnished Holiday Let is a great way to earn extra cash. To signup for the FREE digital edition OR paid print magazine. THE DEFINITIVE GUIDE to Paying Tax on Airbnb / Holiday let SIGNUP for our eNewsletter

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