AirBnB rental income

Over the summer I moved out of my main residence and stayed with a friend close by, which meant I could carry on my usual daily routine of work and school runs etc... I received £9,000 rental income covering a 10 week period through Airbnb. I presume I can claim the annual rent a room relief leaving me with taxable rental income of £1,500 ?

Hi,

As you have mentioned your rental income exceeded the £7,500 rent-a-room relief amount, you may choose how you want to work out your tax as shown in the following guidance depending on which is more beneficial to yourself:

HS223 Rent a Room Scheme (2023)

Method A outlines you pay tax on your actual profit for example, total receipts less any expenses incurred, or Method B where you only pay tax on the amount over the allowance, however you would then not be able to deduct any expenses or capital allowances incurred.

HMRC will automatically use Method A to work out any tax liability.

Thank you. 

Hello, thank you for your reply with the option of the Methods you have referred to. More specifically, I wanted to check on the compliance with the criteria attached to the Rent a Room scheme. In effect, it would be "Rent a House" scenario, where the Airbnb guests had full sole occupancy of the main residence, whilst I as the owner would temporarily reside elsewhere and carry on my usual daily routine. Would I still be eligible to claim the Rent a Room allowance if I wanted to adopt the Method B outlined above. Thank you.

Hi, I'm not HMRC Admin but rent a room relief won't be available in the situation you describe. In order for rent a room relief to apply, it would need to be your only or main residence for at least some of the period the property is let. If you're renting out the whole property and residing elsewhere then the temporary accommodation would be your residence for the letting period, not the property being let.

Hi Bella, thank you for your contribution. Whilst the initial question was answered in part, I've probed a bit further as I suspected there may be more to this. Your notes are helpful - can you please provide the reference / source of your post so that I may refer to it. Thank you.

Hi Mark,

If you rent out your house and you do not live in the same property then you cannot claim rent a room relief. In other word they are not lodgers. Please see PIM4001.

PIM4001 - Rent-a-room: overview

However the airbnb may meet the criteria as a furnished holiday letting if the rental property meets the three conditions in:

HS253 Furnished holiday lettings (2022)

There is special tax treatment linked to furnished holiday lets. You may be better reading this link.

PIM4140 - Furnished holiday lettings: special tax treatment of furnished holiday lettings

Thank you.

Hi, If we rent out our own home fully on airbnb- only 60 days a year when we are away, (In 1 week rentals)...I understand we are not FHL. 1) Do we still get the £1000 tax allowance? 2) If so, if we split gross income as husband and wife and split deductable expenses 50-50 do we each get £1000? 3) If not can we still deduct the same expenses i.e. cleaning, airbnb insurance, service charge etc., from our gross income? 3) Can we claim Utility bills and council tax on a pro rata 60/365 basis? Thanks in advance. Stuart

Hi,

1. Yes, you do.   
2. Yes, you need to split it all 50/50 and you both get the £1000.   
3. Not if you are already claiming the property trading allowance. You either opt for that or actual expenses, you cannot have both.

Thank you.

Good evening Sir or Ma'am My spouse and I launched an Airbnb venture in October 2023. We've incurred expenses (Apr 23 - Sep 23) exceeding £7,000 for repairs and enhancements to ensure the property meets safety standards and is in acceptable condition. However, our income from October 2023 to April 2024 amounted to only £2,016. I have a couple of tax-related inquiries: Are we required to file a tax return for the period spanning October 2023 to April 2024? Can we offset our expenses against the gross income for tax purposes? I appreciate your consideration. Etienne

Hi,

Depending on how you treated the Airbnb, for example as a furnished holiday let or Rent-a-Room, there are different tax rules.  

You can check if a tax return is required here:

Check if you need to send a Self Assessment tax return

Allowable expenses can be set against the rental income received and usually where the net income is below £2500 a return is not required, but we would suggest recording a breakdown of the rental income and expenditure and sending this to us.

Losses can be carried forward and set against future profits of the same business.

You can find more information about rental income in our Property Income Manual here:

Property Income Manual

Thank you.

Hi, I rent out my flat on Airbnb and I’m looking for clarification on how I correctly pay tax. I have a few specific questions that it’d be helpful to clear up: 1) does Airbnb automatically pass on income information or do I have to file this separately; if so, how do I do this and when? 2) are there any tax allowance that apply if I rent out the entire property? 3) where do I state the costs I incur from renting it out? 4) do I only need to pay tax on the profit? For example, income (£2000 pm) - mortgage & bills (£1700) - servicing costs (£200 p/m) = profit (£100pm) 5) if the property has decreased in value can this be used to offset any profits? If so, how do I report this? Thanks

Hi Rory,
1.) You are correct, Airbnb do pass on rental income information to HMRC as a requirement.
However, it is also your own personal responsibility to inform HMRC of any rental business income via the Self-Assessment Tax Return.
This is done within the SA105 property page if your profits exceed £2,500 after any deductions are taken, with profits between £1,000 and £2,500 notified to PAYE.
2.) Depending on certain criteria, rent a room relief may apply.
Please follow the attached guidance for more information:
Rent a room in your home
3&4.) Within the SA105 page, there shall be boxes to disclose rental income and expenses depending on the type of expense incurred, to which the calculation shall only produce a tax liability if a profit is made and your personal allowance has been exceeded.
Thank you. 

Hello, Airbnb have asked for my N.I number to supply information to HMRC I am retired and have for the past year operated the rent a room scheme which will not exceed the £7,500.00. I fill in an annual self assessment tax return. A couple of Questions. A)Am i correct in that I don't have to declare the amount received? B) How will Airbnb giving HMRC my earnings from my letting effect my Personal tax self assessment? I hope someone can help me please? Thank you

Hi ,
 

If your income from property rental is over £1,000 but under £2,500 you still need to declare this income to us by writing in even if you do not owe tax on this income.  If your property income is £2,500 after allowable expenses or £10,000 gross before allowable expenses this income still may not be taxable but will need not be declared on a self-assessment tax return form.  As you are already in self-aessment and it sounds as though your property income was over £1,000 it should have been routinely declared on an SA105 UK property page on your annual tax return.  If your rent a room income is under the rent a room scheme allowance this will have no impact on your final tax calculation even if we add this income retrospectively to your previous years tax returns. Thank you .

Hi - I've recently started renting a room on Airbnb during the school holidays. I'm not sure yet how much I'll earn in a year but I'm wondering what the tax allowance is? Do I add it to my earnings on my Self Assessment form? Also, can you tell me what expenses are allowed, for example can I claim a percentage of my energy / water bills? I've noticed the Rent a room scheme, is this relevant to me? Thank you

Hi,

Thank you for your question. I assume you are renting a room in your own property. In this case the rent a room scheme would apply. Under this scheme you are allowed to receive £7500 per

year before becoming liable to tax on this income. If the income exceeds £7500 the remainder would be taxable on top of your other taxable earnings on your self assessment form. If you are

claiming the rent a room relief you cannot claim any other expenses. 

Thank you.

 

Hi, I have a furnished holiday let property which I rent through airbnb. Am I correct that: a. I can not claim 'any' improvements to the property, made before the property was rented? b. I can claim on furniture and white goods purchased for the property? Many thanks.

Hi,

 You are correct in saying that you cannot claim for any improvements to the furnished holiday let made before the property was rented. You can claim the cost of improvements against any

capital gain when the property is sold. If the FHL business uses cash basis accounting, the full amount of capital expenditure incurred on white goods and furnitutre can be deducted as a

normal allowable business expense of the tax year when the expenditure is actually paid.

Thank you.

Hi, I have just started airbnb and letting the furnished room on my property. Airbnb just asked my National insurance number so they can tell my earning at the end of financial year. Question arises over here 1. If I tell them my NI number, will the income be added in my PAYE and my tax bracket will increase? 2. If it is added in my PAYE then my tax code will be change? 3. How I can tell HMRC that I come under rent-a-room scheme and how that will work with my PAYE?

Hi,
 

Thank you for your question.  If you let a room in your house the Rent-A-Room scheme allows you to receive up to £7500 per year without incurring any tax liability, or completing a Self Assessment return.  If your Rent-A-Room income is below the £7500 threshold then you do not need to inform HMRC and your PAYE code will not be affected.  If you receive more that £7500 then you will need to declare this by way of a Self Assessment tax return.  For more information, please refer to our Helpsheet HS223, which can be found online at : HS223 Rent a Room Scheme (2024)   . Thank you .