June 21

How to Handle Undisclosed Airbnb Earnings


The rising popularity of serviced apartments attracts guests seeking hotel-like comforts while maintaining their privacy. To stand out among the competition and increase profitability, it’s crucial to enhance your marketing strategies for your multiple properties in town.

This article is a guide on how to handle undisclosed Airbnb earnings. HMRC’s fresh probe into Airbnb hosts has compelled the platform to disclose earnings data for tax investigation. Unclear tax regulations on holiday-let income may lead to unintentional or deliberate non-disclosure by property owners. Failure to report earnings carries severe consequences, including fines and even criminal charges. To ensure proper tax compliance, holiday-let owners must understand their obligations and seek assistance if needed. 



Income generated from holiday-let properties is generally taxable, varying based on individual circumstances. Seeking professional advice helps ensure accurate tax calculations and prevents potential issues. If owners realize they haven’t paid the correct amount of tax, assistance is available.

The Let Property Campaign (LPC), initiated by the government, allows holiday-let owners and landlords to disclose unpaid taxes on residential properties efficiently. This established system is the primary disclosure method for Airbnb hosts contacted by HMRC, facilitating the correction of mistakes. Owners can notify HMRC online through the LPC, then have 90 days to calculate their tax, including any interest or penalties.

Engaging a tax professional is advisable to avoid further errors. Depending on the tax offense, investigations may cover several years, even up to 20 years. Owners must maintain organized records to meet the 90-day submission deadline. Mistakes usually stem from complex tax rules and can be rectified in a cooperative environment through the LPC.

Owners should proactively review their holiday-let income, disclosing any mistakes promptly. HMRC’s recent data request from Airbnb demonstrates its commitment to recovering unpaid taxes. Owners and landlords mustn’t adopt a “wait and see” approach, risking a time-consuming and stressful investigation, loss of control, higher penalties, and expanded scrutiny of their tax liability, regardless of other flagged issues.

Being proactive is crucial, and holiday-let owners should willingly address and rectify any errors to ensure a smoother resolution. Seeking independent advice, when necessary, assures owners that they are acting responsibly and minimizing the likelihood of future tax liabilities.


* Matthew Watkins is tax disputes and disclosures director at accountancy firm Menzies LLP *


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