You may have seen in the newspapers that Airbnb will share data with HMRC about the earnings of hosts for property rentals (those who let out property) on its UK platform in the years 2017/18 and 2018/19.
It is anticipated that HMRC will use this data to open enquiries into the tax affairs of individuals who have not declared letting income for 2017/18 and 2018/19. The deadline for opening an enquiry into a self-assessment return for 2018/19 is 31 January 2021, if the return was issued and submitted on time. The discovery rules allow HMRC to go back much further, potentially up to 20 years in some cases if the property income has not previously been reported.
Rent covered by rent a room relief
For many property owners the rental income will be tax free if it is within the £7,500 rent a room relief and will not even need to be reported. This applies where room(s) in the taxpayer’s main residence are rented out, typically to lodgers. Where the house is owned jointly, they would qualify for £3,750 each tax free.
This £7,500 exemption would also apply where the property owners are temporarily absent and rent out their property, for example a house in SW19 during the Wimbledon fortnight.
A few years ago it was proposed that such lettings would not qualify but the legislation was dropped and the CGT lettings relief restriction was introduced in the latest Finance Act instead.