Airbnb host with a tax return to complete?
In the space of just 12 years, Airbnb has gone from being a loose community of amateur hosts offering spare rooms or temporarily vacant homes to travellers to a ubiquitous part of 21st century travel plans. The company has had triple-digit growth in several European cities since 2014.
If you’re lucky enough to have a spare room in the right location, becoming an Airbnb host can provide a nice bit of extra income. But there are tax rules you need to be aware of.
Do I have to declare my Airbnb income?
Everyone is entitled to earn a certain amount of money tax-free, from whatever source this may be- employment, dividends, or income from renting space on Airbnb. However, everyone must pay tax on any income that exceeds their personal allowance, which is currently set at £12,500 per year.
Profit from Airbnb earnings are not exempt. You must declare this income and make sure the treasury gets its share. You do this by completing a self-assessment tax return.
What kind of expenses can I claim?
Your profit is the amount left once you’ve added together your rental income and taken away the expenses or allowances that you can claim. The kind of expenses you can deduct if you pay for them yourself include things like general maintenance and repairs, utility costs, wages for cleaners or gardeners and the cost of advertising the property. You can find out more about this on the HMRC website.
If you are more than an amateur AirBnB host, are selling your property or jointly own your property, it gets a bit more complicated and you might want to get advice from an accountant with expertise in areas such as VAT and capital gains.
There are exemptions to paying tax on small(ish) amounts of rental income. If you earn less than £1000 a year, you may not need to notify HMRC. If you earn less than £7500 a year then you can apply something called the rent-a-room allowance and your income can be tax free. But under either scheme you can’t deduct any property expenses.
untie your Tax Return
So, there are some tax implications which come with renting out an Airbnb room, apartment or house, and the rules change from time to time, but you shouldn’t need to be a tax expert to be an excellent host in your home town or city.
That’s where untied comes in. The app will prompt and guide you as you input income and expenses relating to your life as a host, keeping your time free for more important things. You can relax, knowing you’ll pay exactly what you owe and enjoy any tax relief you might be entitled to, allowing you to get on with sharing your corner of the world with visitors from all over the globe!