UK Tax rates on Airbnb 2019/2020

[Pippa27]

Hi everyone. I am trying to find out what the new tax rates are for airbnb this tax year so I can ensure I keep the money aside. There is very little online about the new rules for this tax year but my understanding is the government are taxing more on airbnb. I will have an Accountant to double check all at the end of the tax year so this is just an idea of tax rates for now (so I can plan).

This is my siutation:

I rent out my spare room at weekends sometimes. Therefore it is not my entire place I rent out. I have a job so I earn above the free tax threshold. Do you know how much I will be charged tax? I know last year we had a threshold of earning £7500 tax free on airbnb but I think this has now changed?

This is my partner's situation:

He still lives and is regiestered at his home and goes back there from time to time. However he works away in London for weeks at a time so he rents out the entire place on airbnb. Do you know what the tax implications are for him?

Thanks all

Pippa

[Ian-And-Anne-Marie0]

@Pippa27 

Last time I looked your £7500 was still the allowance for what they call  'Letting a room" (Check HMEC for that https://www.gov.uk/search/all?keywords=letting+a+room&order=relevance ). This is a simplification of the more complicated system that your partner might find himself in which is to run the Airbnb as a 'business' where you can claim for expenses like: a % of mortgage payments (reducing down from what was 100% 2 years ago to 25% now, electicity, gas, water, Repairs & Renewals, breakfast expenses, cleaning, insurance, etc... The flat rate £7500 does not allow you to claim back any of those expenses as its designed for simplification and as a flat fee.

I say 'business' but its more of a 'business type way'. 

Airbnb occupancy rate will will kick into these figures too. I'm rusty on this and I need to check each time I do a tax return, but ABB is government restricted in the UK to 90 nights, after which formal planning is required for a holiday let. Those 90 nights might be over a 6 month period (say) or maybe more, and that 6 months forms the percentage of claim you can make for indirect costs - such as: 6/12ths of 25% of mortgage payments... same with electicity, gas, water,  insurance, etc...

There's no hard and fast rules, only you decide which route suits you and your situation best.

You both need to pay the tax on the income but your partner might find running the 'business' model and claiming the expenses back more beneficial to him.

[Pippa27]

Thanks Ian & Anne-Marie thats useful info. I will look into it further with him. Really appreciate the advise and time.

[Helen3 · Accepted solution]

Hi @Pippa27 

As you are paying an accountant to help you with your taxes, they are the best person for you to approach regarding your queries regarding tax issues. 

1. I am not aware of any new tax rules for the 'rent a room 'in the UK. could you link to these please Pippa.  As far as I was aware nothing has changed from last year. 

2. There are far too many variables regarding your partner's situation to provide any meaningful advice. Again your/his accountant is best placed to advise him on his tax situation.

[Pippa27]

Hi Helen. Thanks for your comments and for clarifying no change. That's a relief. Will speak to accountant for my partner. Thanks a lot.

[Katy174]

Hi @Pippa27 it would be really helpful to know what the offical outcome was for you partner's situation if you could please share that?

thanks, Katy

[Pippa27]

Hi Katy. He actually ended up taking it off Airbnb as his situation changed. I think he will need to do a self assessment tax return at the end of the year though for what income he did get from it. Sorry couldn't be of more help.

[Naz275]

Hi Everyone

I'm new UK host only renting 1 bed room in the home I live in. 

I know that in UK £7,500 rental income is tax free. If my rental does not exceed this do I still have to declare it ? 

Is there also a limit to the n.o of days rented in the year that is allowed part of this tax free deal? 

I'm in full time employment under PAYE so do not complete self assessments. 

Anyone in similar situation? 

I don't plan to earn over £7,500. 

Thank you 

Naz 

[Helen3]

Do have a look at government information on their website that outlines the scheme whereby you can let out a room tax free for up to 7500 as it will give you the answers you need.

1. No

2. No

3. Yes  thousands of hosts throughout the UK are