Airbnb hand over ‘goldmine’ of hosts’ data to HMRC. Are you at risk?

Airbnb has been forced to share users’ income details with HM Revenue & Customs (HMRC) according to widespread reports in the press.

It is part of a crackdown on holiday let owners who fail to declare their incomes and to help HMRC identify people who owe tax. If you have not already declared any rental income via Airbnb sources to HMRC you are at an increased risk of HMRC opening an enquiry into your tax affairs. This also applies to other rental income sources. HMRC have a wealth of information available to them from sources such as land registry and rental agency websites. Daniel’s blog explains the data sources HMRC has available in addition to the Airbnb data https://whitingsllp.co.uk/one-to-many-nudge-letters-and-data-accessible-to-hmrc/

If HMRC should discover any undeclared income they will seek to recover the underpaid tax. If this has never been declared HMRC can go back 20 years. It may also raise suspicion that there are other income sources you may not have declared, risking HMRC investigating your tax affairs in more detail. As well as interest being charged on underpaid tax, penalties will also be considered for the failure to notify HMRC of the liability. These can be levied at up to 100% of the tax underpaid.

However if you make a voluntary ‘unprompted’ disclosure to HMRC these penalties can be mitigated, usually down to 10%. HMRC run a let property campaign which allows a voluntary disclosure to be made online and allows minimum penalties to be offered. A voluntary disclosure often results in a speedy resolution without further enquiries from HMRC. More information on disclosures to HMRC can be found on Rob’s blog https://whitingsllp.co.uk/taxes-honesty-is-the-best-policy/

If you have undeclared Airbnb income to report to HMRC, or any other rental sources; or maybe you believe you made no profit but need to check the situation, we can assist you with this and ensure you are remaining tax compliant. We can also deal with HMRC on your behalf, making the declaration online, relieving the pressure on you and securing the lowest penalties. We will also ensure you are claiming any relief’s you are entitled to.

Additional property held will impact your Inheritance Tax position, especially at the current level of house prices. We offer tax planning services and can assist with mitigating your exposure to Inheritance Tax.

Please do contact your local Whitings Office if you would like further information on making a disclosure to HMRC, or are concerned about your position.

Disclaimer - All information in this post was correct at time of writing.