- Shepherd Partnership
HM Revenue & Customs campaign is targeting those who are not correctly reporting short-term property
HMRC is writing to those taxpayers with short term letting income through sites such as Airbnb and Booking.com, etc who they believe may not be getting their tax affairs correct.
Anyone receiving a letter from HMRC should not ignore it. However, the income is not always taxable as there is a relief available for letting rooms in your own home if gross receipts is less than £7,500 in a tax year (this is halved if you share the income with someone). This does not apply to any home other than your main home. However, UK landlords have a £1,000 tax free allowance on income earned from land and property if the Rent a Room Scheme does not apply.
Anyone with income not totally covered by the reliefs will need to report the income to HMRC and we would recommend seeking professional advice in how best to respond to any ‘nudge’ letter received. Even if you have not been prompted by HMRC, please note that if you do not make a voluntary disclosure before HMRC finds out about undeclared income, your penalties will be higher or you could even face prosecution.
If you need help to disclose undeclared income, either from letting or any other source, please get in touch with Heather Langtree, our director who specialises in personal tax.