Tax for Airbnb & Short Let Hosts in the UK

Running an Airbnb or short-let in the UK can be a great source of extra income but it also comes with tax obligations. Whether you let a spare room or manage multiple holiday rentals, HMRC expects you to declare your earnings and pay the correct tax.

At Taxwise Accountancy, we're online accountants for Airbnb and short-let hosts across the UK. We help you understand your tax position, claim the right reliefs, and stay compliant all while making the process simple, efficient, and stress-free.

Airbnb Tax Accountants

HMRC & Airbnb: Data Sharing and Compliance

Platforms such as Airbnb, Booking.com, and Vrbo are now required to share host income data with HMRC.

From January 2025, digital platforms will automatically report host income each year.

HMRC has already started cross-checking Airbnb data and sending 'nudge letters' to hosts who haven't declared income.

💡 In summary: If you earn money through Airbnb, HMRC will know. Keeping accurate records and filing correctly is now essential.

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Understanding Airbnb Tax Rules in the UK

Rent-a-Room Relief

If you let a furnished room in your main home, you can earn up to £7,500 per year tax-free (£3,750 if jointly owned). Above this limit, you must file a Self Assessment tax return.

Property Income Allowance

If you rent out a separate property (or your whole home occasionally), you can earn up to £1,000 in gross income tax-free. Once you exceed £1,000, you must register for Self Assessment and pay tax on profits.

Furnished Holiday Lettings (FHL)

If your short-let meets the FHL rules (availability, letting, and pattern of occupation tests), you may currently benefit from extra tax advantages — including capital allowances and CGT reliefs.

However, the FHL regime will be abolished from 6 April 2025, so now is the time to review your position and plan ahead.

Your Airbnb Tax Obligations

1. Register for Self Assessment

If your Airbnb income exceeds the Rent-a-Room or property allowance, you must register for Self Assessment and file your tax return.

UK tax year: 6 April – 5 April

Paper deadline: 31 October; Online deadline: 31 January

2. Keep Detailed Records

Maintain records of:

  • Income received (including Airbnb payouts)
  • Nights let and days available
  • Allowable expenses (cleaning, repairs, insurance, platform fees, etc.)

3. Declare Correctly & Claim Expenses

You can claim a wide range of expenses against your Airbnb income, such as:

  • Cleaning and laundry
  • Utilities and council tax (proportionate use)
  • Repairs and maintenance
  • Advertising and platform service fees
  • Mortgage interest (subject to tax relief rules)

If you use the £1,000 property allowance, you cannot claim further expenses — we’ll help you choose the most tax-efficient option.

If You Haven’t Declared Airbnb Income

HMRC can demand unpaid tax, charge interest, and impose penalties for undeclared income.

If you’ve missed previous years, you can disclose voluntarily through the Let Property Campaign often resulting in lower penalties.

We can handle this process confidentially and efficiently.

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Additional Considerations for Hosts

Capital Gains Tax: May apply when you sell your rental or Airbnb property.

VAT: If your total turnover from short-lets exceeds £90,000, VAT registration may be required.

Business Rates: Some frequently-let properties may fall under business rates instead of council tax.

FHL Transition: From April 2025, FHL reliefs are ending — plan now to avoid surprises.

Additional Considerations for Hosts

How Taxwise Accountancy Can Help

We’re nationwide online accountants specialising in Airbnb and short-let property tax. Whether you host a single room or manage a property portfolio, we’ll keep you compliant and tax-efficient.

  • Registering for Self-Assessment and submitting returns

    Our experienced team assists you in the process of registering for Self-Assessment and provides step-by-step guidance on submitting returns accurately and on time.

  • Identifying allowable expenses and reliefs

    Our dedicated experts meticulously identify allowable expenses and reliefs to maximize your tax savings and optimize your financial outcomes.

  • Managing FHL transitions

    Receive expert guidance on effectively managing transitions related to Furnished Holiday Lettings to ensure a smooth and compliant process.

  • Handling HMRC disclosures and enquiries

    Let us handle all HMRC disclosures and enquiries on your behalf, guaranteeing precision, compliance, and peace of mind throughout the process.

  • Advising on tax planning and structure

    Our team provides tailored advice on tax planning strategies, efficient record-keeping practices, and effective bookkeeping systems to enhance your financial management.

  • Advising on record-keeping and bookkeeping systems

    Benefit from our expert advice on implementing and maintaining robust record-keeping and bookkeeping systems to streamline your financial processes and ensure accuracy.

Frequently Asked Questions

  • Do I have to pay tax on Airbnb income?

    Yes. All Airbnb income is taxable unless it falls within Rent-a-Room or the £1,000 property allowance.

  • What if I rent out a room for only a few nights?

    You may not owe tax if income stays below £7,500 (Rent-a-Room) or £1,000 (Property Allowance), but keep full records in case HMRC asks.

  • I’ve never declared my Airbnb income — what should I do?

    Act now. You can use the HMRC *Let Property Campaign* to disclose past income voluntarily and reduce penalties.

  • Does Airbnb report my income to HMRC?

    Yes. Airbnb and other platforms share data with HMRC. The first official annual reports are due in January 2025.

  • Can I claim for cleaning, bills, or repairs?

    Yes — as long as the expenses relate directly to hosting. We’ll help you claim everything you’re entitled to.

  • Do I need a limited company for Airbnb?

    Not necessarily. Most hosts are taxed as individuals, but we can advise whether incorporation would benefit your circumstances.

Speak to an Airbnb Tax Specialist

At Taxwise Accountancy, we work online with Airbnb and short-let hosts nationwide.

We’ll help you register, stay compliant, and reduce your tax bill — so you can focus on hosting with confidence.

📞 Book a free consultation today or message us online to get started.

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