Self Assessment tax returns and Airbnb earnings.

[Barbara1544]

I am unclear as to whether I need to include the gross Airbnb amount including service fees for my UK self assessment tax return or whether the amount should be less service fee, particularly as I claim the Rent a room allowance which suggests that I cannot include additional expenses.   Does anyone have a clear answer please?

[Helen3]

You don't need to declare anything if you are using the rent a room scheme if youre income doesn't go above the annual limit @Barbara1544 

[Barbara1544]

We are way over the 7500 but I still use this method as it gives more relief than claiming expenses for us.

[Helen3]

Just checked your listings and agree with @Mike-And-Jane0 

How are you using the rent a room scheme when you have three self contained listings ?

[Mike-And-Jane0]

@Barbara1544 I believe you declare the gross earnings including service fees. If I remember rightly you can still claim expenses even when using the rent a room scheme but suggest you go on gov.uk and search for rent a room as its all very clearly laid out there.

I've just looked at your listings and don't see how any of them can qualify for the rent a room scheme. Again the rules are clear on gov.uk and you can always correct past tax returns as the penalties are lower if you correct before being caught.

[Barbara1544]

I believe we qualify for Rent a Room Scheme because although our listings are self contained, one of them is the house is where we live, but we cordon off a large area which is self contained.   It is part of the same house that we live in.   Do you believe that is incorrect then?

[Helen3]

If the area is self contained then it doesn't qualify for the rent a room scheme @Barbara1544 

[Mike-And-Jane0]

@Barbara1544 If there is an internal door linking your area and the guest area then it might qualify. If not it certainly doesn't. Looking at the rules below I don't think it applies

0.1 When you can use the Rent-a-Room Scheme

You can use the scheme if:

• you let a furnished room to a lodger
• your letting activity amounts to a trade, for example, if you run a guest house or bed and breakfast business, or provide services, such as meals and cleaning

0.2 When you cannot use the Rent-a-Room Scheme

You cannot use the scheme if the accommodation is:

• not part of your main home when you let it
• not furnished
• used as an office or for any business — you can use the scheme if your lodger works in your home in the evening or at weekends or is a student who is provided with study facilities
• in your UK home and is let while you live abroad

[Barbara1544]

Thanks that is really helpful.    Yes it is joined by an internal door which is unlocked when not booked via Airbnb.   For example we have no bookings at all this Summer as it is closed and is fully used as our home.   Also thanks for pointing out that you can also re-claim expenses whilst using the scheme and that I need to report gross takings which I will now go back over all previous assessments and correct if that is necessary.   Given that I could offset the Airbnb fees as expenses as suggested, I would imagine that this  would be the same as submitting the net figure so would work out the same?

[Helen3]

I don't believe you can claim expenses against tax under the rent a room scheme. @Barbara1544 

If your internal door is locked when doing STR and guests don't share communal areas with you such as a bathroom/kitchen then I don't believe you can use the rent a room scheme . 

[Mike-And-Jane0]

@Barbara1544 You really need to read the government rules on this. The rule below explains when you can and cannot claim expenses. BUT I think it is irrelevant as the previous advice I showed said

You cannot use the scheme if the accommodation is:

• not part of your main home when you let it

So I really don't think the scheme works for you at all.

Do please read the rules on gov.uk as I think it has changed over the years.

1.2 If your gross receipts are more than the Rent-a-Room limit

If your gross receipts are more than £7,500 (or £3,750), you can choose how you want to work out your tax:

Method A

You pay tax on your actual profit — your total receipts less any expenses and capital allowances.

Method B

You pay tax on your gross receipts over the Rent-a-Room limit — that is, your gross receipts minus £7,500 (or £3,750). You cannot deduct any expenses or capital allowances if you choose this method.

HMRC will automatically use your actual profit (Method A) to work out your tax.

If you want to pay tax using Method B, you need to tell HMRC within the time limit. You will continue to pay tax on your gross receipts over the Rent-a-Room limit until you tell HMRC that you want to change back to paying tax on your actual profit (Method A).

If you pay tax using Method B, this automatically stops if your rental income drops below £7,500 (or £3,750) limit.