The nature of Airbnb stays may have changed, but the appetite remains the same. While there have been fewer short stay foreign visitors, long-term stays in our properties have significantly increased in recent months- showing that letting your property on Airbnb is an investment that stands the test of the pandemic.
But with the news that Airbnb will now be sharing data with HMRC about the 225,000 people in the UK who make money through their site, it’s important for you to know how we’re continuing to protect our clients’ investments by keeping them on the right side of the law.
Will I be affected?
Some things haven’t changed, you’re still able to earn up to £7,500 per year through renting your home on Airbnb. So if you’re within these limits, you can relax, safe in the knowledge that we’ll keep managing everything for you while you reap the benefits. However, if you earn more than this, we provide advice on how to declare the income.
I think I should have been paying tax but haven’t. What should I do?
First of all, don’t panic. HMRC has advised that you have until the end of January (31st) 2021 to declare past earnings from the 2018/2019 tax year. If you’re worried about money you might owe, our expert team can point you in the right direction. After all, we’re here to make your life easier.
How will HMRC get in touch?
HMRC has stressed that there will be no penalty for anyone who makes an amendment to their 2018 to 2019 tax return to update their amount owed. This is good news for anyone in this boat and means there will be no extra financial hit for correcting past errors.
However, if you owe money and don’t make arrangements to correct this with HMRC, you can expect to hear from them. While they won’t be breaking your door down or freezing your accounts anytime soon, they will contact you and you could be hit with financial penalties on top of any tax monies owed. These can be anything from 1-100% on top of owed tax revenue, so it’s best not to delay.
I’m not sure if I owe money?
If you are unsure if this update affects you, an accountant or tax specialist who will be able to help you figure out what you might owe. Failing that, HMRC will contact you with a letter notifying you that you owe them money in undeclared tax. Although it’s best to be proactive and get looking through your statements to stay ahead of the game and avoid paying heavy penalties.
How we’ll keep you on the right side of the law
Tax can be a tricky business to navigate, but just like everything else we do, from listing, managing and cleaning your property for you – we’re here to make your life simpler. That’s why we’ll always keep you in the know with anything that could affect you. You can find out about other Airbnb updates for 2020 here.
If you have any queries or questions for us, be sure to get in touch and one of our team will help you out.