ACCA is warning that HMRC is targeting taxpayers who make money from renting out property through Airbnb as the accommodation sharing website gains popularity for short-term lets
Chas Roy-Chowdhury, ACCA head of taxation, said: 'Money made by renting out a property through Airbnb will be classed as income and must be declared to the taxman. If you are using the website to rent out a property you own then I would strongly advise you to make the necessary declaration to HMRC
ACCA’s warning comes after thousands of Airbnb hosts in Ireland were told they could face tax bills as a result of letting rooms, after the Irish Revenue clarified that this was classed as holiday rentals in a series of statements last year.
This means hosts cannot qualify for the ‘rent-a-room’ relief, which is available for people who let out a room on a residential basis for short term periods, eg to a student. This is in contrast to the situation in the UK.
In Ireland, Revenue published guidelines on its rent-a-room scheme, which allows people to earn up to €12,000 (£9,000) tax-free a year from residential lettings. In those guidelines it made it clear short-term lets to guests, ‘including where such accommodation is provided through online accommodation booking sites’, did not fall within the terms of the relief.
The clarification stated: ‘Income from the provision of accommodation to occasional visitors for short periods, including, for example, where the accommodation is provided through online accommodation booking sites, does not qualify for relief as the visitors use the accommodation as guest accommodation rather than for residential purposes.
‘Income from guest accommodation such as a bed and breakfast or a guesthouse operation is generally treated as trading income and not rental income. This type of income, even where it is under the relevant limit, does not qualify for rent-a-room relief.’
In addition, Airbnb has been required to give the Revenue details of Irish property owners using its website to accept bookings for rentals.
In a statement made last autumn, Airbnb said the company had informed hosts of the legal requirement for Airbnb Ireland to report host earnings to the Office of the Revenue Commissioners.
‘This is a legal requirement for Airbnb Ireland, similar to our obligation to report host earnings in the US. The reporting requirement exists because on 1 May 2014, Ireland became Airbnb's home base for all transactions outside the United States.’ Airbnb said in the statement.
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