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Tax on AirBnBing?


#1

Hi! I’m often away for work and put my small flat on AirBnB for someone else to use. I was wondering if the money I get from this counts as taxable income? I’ve looked at this tax calculator but not sure how it works. Can someone here help?

Cheers :slight_smile:


#2

Perhaps tell us where you are as tax regimes differ widely.


#3

In the majority of countries any earned income on a whole listing is taxable.

However just get in touch with your tax office and they should be able to advise you.

As @Joan different countries operate differently and we don’t know where you are :slight_smile:


#4

That link didn’t work, my apologies. Here it is again: https://www.income-tax.co.uk/


#5

Hello @reecec

If you are in the UK it definitely counts as taxable income. Whether and how much you will be taxed will depend on your other income sources.

I don’t know where this tax calculator is from but would suggest you speak to the HMRC. You just need to declare Airbnb income on your tax return in addition to any paid work you generate through PAYE means.

You will also need to keep details of any expenses incurred which can be offset against your profits.


#6

If you are in the UK the Rest a Room Scheme applies. You can earn up to £7500 tax free in your own home. There are no expenses allowable and above £7500 is taxed at your normal rate. It is entered on the property section of the tax return.


#7

Sorry @Jess1

I don’t think you are correct on this one.

He says he rents out his flat when he is away, so it is a whole place listing not a room in his home and as such there is no tax free allowance.

Hence my suggesting the self assessment route.


#8

It’s still his primary residence.


#9

Hi @Jess1

I am not sure your interpretation is right on this. The legislation was set up to provide tax relief to those who offer a room/rooms in the homes they live in and then share with their lodgers. To help ease our housing crisis,

Not to provide tax relief to those who let out their place in its entirety while they are living abroad or elsewhere in the country.

My understanding is that doesn’t matter whether it is his primary residence. What matters is whether he is living there when he rents out a room or rooms in his home.

@reecec do give the HMRC a call to clarify. It would be useful if you come back and let us know.


#10

YepI would say it depends on the length of the resident’s stay away from home. If it’s for weekends or a couple of weeks at a time, the Rent a Room Scheme would apply. If he’s away for months then it would indeed be a whole flat let. I daresay the exact definitions would be on HMRCs extensive website, or there is a helpline.


#11

It shouldn’t matter if it’s a whole flat:
‘The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.
You can let out as much of your home as you want.’
It can even be used for B&B:
‘Eligibility
You can opt in to the scheme at any time if:
you’re a resident landlord, whether or not you own your home
you run a bed and breakfast or a guest house’
(Taken from HMRC)


#12

Thanks Annette @Jess1 yes I understand the legislation.

It’s the RESIDENT part, I think the OP would fall foul of.

The legislation is changing soon to close the loophole of it being used by people who Airbnb rooms in their homes and income will then become taxable anyway.


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