With more people staycating the demand for holiday property has never been higher and many people are taking advantage of this increase in demand. Airbnb often has the flexibility owners require, whether you are letting a room in your own home or a separate property.
However don’t get caught out by the taxman who will expect you to report and pay tax on any taxable profits.
Ensure you have adequate records to enable you to total your income for each tax year and claim all allowable expenses.
If you make a loss in any year you should still report this to HM Revenue and Customs to enable it to be offset against any future profits.
Tax relief will be available for finance costs of an Airbnb. If the property was previously let as long-term residential property then this relief would not have been available.
If the availability and number of lets meet the relevant criteria, then the property may also qualify as a furnished holiday let with all the relevant income tax and capital gains tax advantages (see our previous article).
If you are looking at selling your Airbnb there are a host of tax planning considerations to ensure you minimise the tax on sale.
If the letting is part of your own home then you will not have any liability to income tax if the income is less than £7,500 (or £3,750 each if the property is jointly owned by 2 people). However, you will still need to complete a tax return if the net income exceeds £2,500, even if there is no income tax liability!
If you are concerned whether or not you have claimed all allowable expenses, reported (or not reported) your income correctly on your tax return or have any other tax concerns regarding your Airbnb contact us and speak to one of our property letting experts for a free initial consultation.
