Following the filing of Airbnb’s UK company accounts to Companies House, it has become clear that the company has shared data with HM Revenue & Customs (HMRC) relating to the earning of hosts hosts that used the UK platform in the 2017/18 and 2018/19 tax years.
It is believed that the number of UK hosts that were the subject of this data sharing is c225,000.
This followed an investigation into the company’s affairs by HMRC which also resulted in additional tax being payable by the company.
This was reported on Reuters – see here.
Furnished holiday letting owners/businesses should be declaring income to HMRC on a tax year basis on a self-assessment tax return, and paying income tax on profits via the self-assessment tax system.
If Airbnb hosts have not declared income in the past, a disclosure should be made to HMRC disclosing the previously undeclared income.
The data sharing by Airbnb now means that HMRC have a significant amount of data to be checking whether hosts have correctly declared income. Where they discover that income has not been declared, or under-declared, they will likely raise enquiries that will result in outstanding income tax being payable, with interest, and almost certainly result in penalties.
The penalty situation is made a lot better by a taxpayer going to HMRC first (called an ‘unprompted disclosure’), as opposed to HMRC coming to them first, resulting in a so-called ‘prompted disclosure’ by the tax payer.
The data sharing by Airbnb means that there is now little time for taxpayers that have used Airbnb as a host platform that have not declared, or under-declared income to make an unprompted disclosure to HMRC and access the more favourable penalty regime.
For many in this situation, capital allowances claims would be worth looking at to check whether they have maximised such claims. Any previously unclaimed capital allowances could mitigate the amount of any overdue income tax payable. Consequently, we would urge affected taxpayers to seek experienced advice from an experienced chartered tax adviser