HMRC Letter: Your Income from Short-term Property Letting

23/12/2023 - 5 minutes read

HMRC letter for declaring income from short-term property letting has been sent out this week based on the information that HMRC have been provided by letting agents and online platforms such as Airbnb.

HMRC Letter: Your Income from Short-term Property Letting

HMRC Letter: Your Income from Short-term Property Letting

HMRC letter for declaring income from short-term property letting states “We have information that shows you may have earned income from short-term property lettings. If you have not told us about this income, you may owe tax.

Hmrc letter for declaring income from short-term property letting

Landlords need to realise that HMRC will know about their lettings through Airbnb, so full disclosure of all their taxable property income is essential, including for all prior years.

Paying Tax on Airbnb Income

You will need to submit a tax return if you are earning rental income & pay the corresponding tax on Airbnb income – the deadline for filing online is typically 31 January each year.

Airbnb has shared data with HMRC on the earnings of hosts for its platform covering 2017/18 and 2018/19 and HMRC is expected to address any issues over hosts’ payment of tax in 2021/2022. We cover this in a separate article here.

Where the let property is located overseas, the worldwide disclosure facility should be used.

Renting a Room Through Airbnb

You may be eligible for a separate tax-free allowance from your main income if you rent just a room through Airbnb. You will be eligible for rent a room tax relief if you rent a room from a property that is your main residence.

If this is the case, you don’t have to pay tax on the first £7,500 you earn from this rental every tax year. If you’re letting jointly (for example, with a partner or friend), then it is £3,750 for each of you. If your rents are more than this then you have a choice to deduct either the allowance or your real costs to work out the taxable profit.

If you need to declare any income

  • – you will need to register for a disclosure

To make a disclosure you should:

  1. – Notify HMRC of your undisclosed income so they can issue you with a Payment reference number (PRN)
  2. – Within 90 days of notification, disclose all undeclared income, gains, tax and duty
  3. – Tell them what you think you owe in total including taxes, penalties & late payment interest
  4. – Pay it as soon as possible.

Or, slightly easier, you can get us to do all that on your behalf!

Have you received a HMRC letter for declaring income from short-term property letting and you have no income to declare?

You need to let HMRC know within 30 days. To do this, please call HMRC on 0300 123 0998 or email them at ISBC.OnshoreDisclosures@hmrc.gov.uk.

You do not have to declare anything if:

  • – you have included your short-term letting profits correctly on your returns each year since 2017
  • – you do not have any profit to pay tax on
  • – you have only just started to make profits and you will include them on your next tax return
  • – HMrc have already taken your rental income into account in your tax code

If you do not respond to HMRC letter for declaring income from short-term property letting then HMRC will open a compliance check and can charge extra penalties so doing nothing will cost you more!

How can MCL Accountants help with HMRC letter for declaring income from short-term property letting?

Contact MCL Accountants on 01702 593 029 if you would like us to provide you with a quote to act as your agents and respond to HMRC letter for declaring income from short-term property letting or if you need any assistance with the preparation and submission of your business accounts or self-assessment tax returns to HMRC.