AIR BnB has done a deal to disclose all their customers' earnings directly to HMRC.

• If you know any friends or family who is not declaring their Air BnB income to HMRC, share this web page.
• Even if they feel they don't need to, best to double check; e.g. letting part of their home under the rent-a-room scheme.
• The disclosure to HMRC is being back dated to income from 2017.

Rent-a-room clarification

• If you rent part of your own home for residential letting (incl' holiday lets), you qualify for a £7500 exemption.
• You have to occupy the property as your main residence.
• The scheme excludes:
• Letting rooms/sheds/garage for office space, storage or driveways for parking.
• Letting your whole house for 2weeks during Wimbledon whilst you go away on holiday.
• The exemption applies to the gross income before any letting costs are deducted.
• i.e. you can claim either the exemption or any letting costs, not both.

Rent-a-room example

• You receive gross rent of £8000 before Air Bnb deduct their costs of £1000.
• Net amount received into your bank £7000.

Results

• One might think as you received £7000 that you are within the exemption limit and do not declare anything - this is incorrect.
• Correct position is gross rent less exemption = Taxable rental income £500 (8000-7500).
• If you choose not to apply the rent-a-room allowance, your Taxable rental income = £7000 (8000-1000).
• The rent-a-room allowance is automatic. 

If your gross rental income is less than exemption, whilst you are not required to declare it to HMRC, you are required to retain your income & calculations to prove it. You need to retain your figures for 5-years after each tax year. In light of the announcement to share their information with HMRC, this highly advisable.

If you feel there is rental income we need to declare, contact me so we can discuss the matter; don't be alarmed we can resolve the situation.