tax

[Kirsten438]

Hello I was helping a friend with his air b n b and was set up as the host with money coming into my bank account and me paying him.  I now realise that I should have been the co-host and not the host but it's too late to change that now - Im trying to do a self asessment tax return and have no clue how to alert HMRC to the fact that these were his earnings and not mine!  Ive made a real mess of this and Im now scared that it looks as though Ive been earning lots of money that I havent been!  He reassures me that he has been doing his tax returns but I have no idea what to do to fix this!  

[Mike-And-Jane0]

@Kirsten438 I believe that the ownership of the property is key. Who owns the property? Anyway I would call HMRC just after they open (to minimise wait times) and they will help you.

[Kirsten438]

Thank you so much. That’s what I thought - property records will

show that he owns the property so I’m hoping HMRC will believe me! I’ve been a bit daft setting it up with me as the host and paying him when it should have been the other way around 

[Mike-And-Jane0]

@Kirsten438 see what they say but you might need to do a tax return declaring the full income and then the 'expense' of sending the money to him.

[Bhumika]

Hi @Kirsten438 , this is pretty much a unique situation! 

I’ve noticed that one of the hosts, @Lorna170 , often recommends reaching out to an experienced accountant in situations like this. 

Have you been in touch with an accountant for the same? 

Regards,

[Kirsten438]

I have tried but no one has got back to me! I’ve written to HMRC to advise them and hope that they will offer advice. I suspect I’ll have to report the full income and outgoings to the owner as ‘expenses’. I’m utterly terrified to be honest and feel so stupid! Hopefully HMRC will get back to me and offer advice 

[Bhumika]

I am so sorry @Kirsten438 ! I can imagine how this situation is worrying, especially when you have been just meaning to help your friend. 

I will reach out to a few more hosts from the UK to see if they can guide us here. Hi @John8185  @Santana6 @Gifty10 @C197 @Enrique1567 @Susie358 @Jane4726 , could you help and advice @Kirsten438 on this tax related situation? Thank you in advance everyone for your support!

@Kirsten438 I hope other hosts are able to share more tips and ideas with you.

Regards,

[C197]

Thanks for reaching out @Bhumika 

@Kirsten438  - this is a very simple matter.

1) write an email to your friend explaining the situation and thanking him for acknowledging that he is doing his returns.

Declare the amount you have earned less the amount you have paid to him.

Make sure you have the 12 months bank statements at hand.

Make sure this does not happen going forward and change to correct settings on Airbnb!

No real point calling them, you will hold for hours and they will probably advice you similar to above.

Write a note at the end of your return explaining situation and also send a separate email to HMRC - 

NB! - make sure to save and safekeep all of this in a special file (online) so if ever it's investigated, you have your ducks in a row! An investigation will probably be triggered if your friend has not declared his income as he says he has!?

I'm 20+ yes qualified, but don't like personal tax 😔

Prefer Management Accounting 🙏🏼

[Bhumika]

Thank you so much @C197 for your kind support 🌻

Lets see if @Kirsten438 heard back from HMRC in the meantime!

Regards,

[Mike-And-Jane0]

@Kirsten438 Another thought. Can you not direct 100% of the revenues to a co-host on Airbnb? I think this is possible but I never had a co-host so am not sure. Also HMRC take months to respond to letters - A quick call is way more efficient and all calls are recorded so make a note of the time/date in case they then go back on what they have said.