Did you know? Trigg & Co has a fast growing sister company which manages holiday lettings for owners with properties on the Island. It's a rapidly expanding area of our business - even more so following Covid lockdown and the growing attraction of 'Staycation'.
Most holiday home landlords will probably have seen recent articles in the national press about the decision by Airbnb to share their property owners’ details with HM Revenue & Customs.
There have been concerns expressed by some Accountants that this disclosure of owner’s short term letting income may trigger a wave of investigations into previously undeclared revenue. In an article written in Landlord Today, The Grunberg & Co accountancy firm have said “…landlords should, therefore, consider making a disclosure and payment to HMRC for any outstanding tax that is due.”
Isn’t this income tax free?
There are an estimated 225,000 properties listed on Airbnb in the UK, so any investigations are likely to be to take some considerable time and resource to investigate. But this is clearly an area where the tax authorities believe there has been undisclosed income and uncollected tax.
Many owners have been caught out due to an accidental misunderstanding of the ’rent-a-room relief allowance’. This applies to landlords who rent out part of the home they live in (like taking in a lodger or renting out a bedroom) and means any income under £7500 is effectively tax-free and does not need to be declared.
However, 2nd homes and holiday lets of a whole house cannot benefit from this relief. Any income earned must be reported under an annual Self-Assessment tax return.
Letting (via Airbnb) through Wight Holiday lettings
If you are using an agent, like Trigg & Co's sister firm Wight Holiday Lettings, to market your property on Airbnb, this should not be a current concern at all. They act as the ‘host’ on Airbnb and the owners’ details remain anonymous. They report all income generated to you, as our client, however the booking was generated so that you can make any necessary declarations for tax purposes. We are currently unaware of any agency being approached by HMRC to share information.
With regulations changing all the time, we cannot over-emphasise the importance of taking professional advice and reviewing your current holiday letting income. You should be taking advantage of all the available tax breaks alongside checking that you are declaring all relevant earnings to the taxman.
If you already have a holiday let, or are considering investing in a holiday home on the Island and have some questions about how this might affect you, please get in touch on 01983 525710 or email us at firstname.lastname@example.org.