Hosting on Airbnb. Does this equal ‘running a business’

[Ben773]

Hi All

I know this has been touched on before so apologies. However I’m not sure that I have seen a definitive answer (perhaps there isn’t one!). My wife and I have been hosting since the end of June (bed and breakfast).  Three of our five bedrooms offered out. We are mortgage free, freehold, detached house. We live in the property. It’s our one and only property and therefore our ‘main residence’. We are one of 6 properties that are served by a private road and private septic tank which is managed through ‘a company’. We put an amount in each month and sit as ‘directors’. Anyway zi digress. In the deeds of our property and that of the other 5 properties mention is made that the properties are not to be used ‘to run a business’. So my question is simple. Is Airbnb Hosting considered a business? Who is the definitive authority on this?  I guess there must be something to refer to. Where is the line drawn? If I (say] knit dolls and flog them on eBay at want point does it turn from a block knitting a few things to becoming a business?

Regards Ben

[Jeff158 · Accepted solution]

@Ben773  each county council has slightly different rules.

You say above that you're a bed and breakfast and yet you think you're not in business. Come on, stop being in denial, you're self employed in the hospitality trade.

3 bedroom b&b where guests have access to less than 50% of the total floor area, doesn't have to register as a B&B for business rates but does have to register with the local council food hygiene dept.

Your kitchen will be inspected and you'll have to pass the online level 2 course on food safety, then you can display your scores on the doors rating.

You also have to carry out a fire safety risk assessment for your premises.

These links have a bit of info

https://www.food.gov.uk/business-guidance/register-a-food-business#who-needs-to-register-01

https://www.scoresonthedoors.org.uk/

https://www.gov.uk/government/publications/do-you-have-paying-guests

[Ben773]

Hi Jeff158

Thanks for the response and the links. I will have a look through.  Much appreciated. It sounds like you are identifying the local authorities as having the final (subjective?) say and that there is no clear line up to which you can operate and not be in business?

How does the situation change if we drop the breakfasts?

Regards Ben

[Lyn3]

@Ben773 @Jeff158 

Good morning. Ben, in my humble opinion it is a business, with or without breakfast supplied. I'm thinking that the guidelines in your housing neighbourhood were put in place to protect the peace and lifestyle of all the residents therein.

That private road will be used by more traffic (your paying guests) and also the septic tank - (by your paying guests).

Your neighbours may feel that you need to contribute more towards the upkeep of both of those amenities...have they mentioned it?

kind regards

Lyn

[Ben773]

Hi @Lyn3   Thanks for the message. The topic of additional use has come up. We have offered an increased monthly contribution which at the moment hasn’t been taken up. We are keen to hear the neighbours concerns and take steps to address them whenever possible. Regards Ben

[Susan151]

@Ben773  You are offering a service for money. Of course it is a business!

[Kaylee18]

@Ben773  100% being a host on Airbnb is running a business. Same with selling a few knit dolls on eBay (lol). 

[Sarah977]

@Ben773  Any product or service you offer in exchange for money is considered a business, whether it's a small business making small profits or a big corporation.

[Ben773]

Thanks all. Seems clear cut and I feel a bit daft for asking the question! It actually refers to ‘trade business’ in the deeds but I guess that is semantics.  It’s curious that Airbnb can operate at all in the UK as I would have thought the majority of titles\ deeds for residential properties would have some sort of ‘no business’ reference. That’s why I ask the question really to establish is there a threshold of sorts. Evidentially not I guess. We have a ‘permitted development’ enquiry submitted to the local  council. Interesting to see what comes back from them. I will update this post accordingly in case people are interested.

Regards Ben

[Jeff158]

@Ben773  now I understand the reason for the question.

A trade business has a tangible product, you are running a service business which has no tangible product.

https://www.myaccountingcourse.com/accounting-dictionary/service-business

[Lyn3]

Hi again @Ben773 

If the restriction mentions 'trade business' - perhaps it refers to noisy occupations and trades where the use of power tools,  drills, circular saws, lathes, etc, might impact on nearby residents ?

Cheers

Lyn 🙂