HMRC have undeclared holiday letting income in their sights…
The 2019 financial statements for Airbnb have recently been published and include a note confirming that it will share data with HM Revenue & Customs (“HMRC”) about the letting income earned by its hosts in the 2018 and 2019 tax... Read more
Blog13th Oct 2020
The 2019 financial statements for Airbnb have recently been published and include a note confirming that it will share data with HM Revenue & Customs (“HMRC”) about the letting income earned by its hosts in the 2018 and 2019 tax years.
What are the impacts of AirBnb sharing data with HMRC?
HMRC have for some time now had the technology to enable the gathering of individual’s data on property income and gains but Airbnb has now agreed to provide this to HMRC directly. We understand that HMRC intend to use this information throughout 2021/22 to identify any issues with payments of tax made by landlords.
This means that HMRC will need to raise enquiries into the affairs of taxpayers in order to deal with potential underpayments of tax in earlier tax years. Although HMRC have only one year from the date of submission of a return to raise an enquiry, where income or gains have been omitted, HMRC have additional powers to go back as far as twenty years.
What should landlords do now?
It is vital that any such landlords bring their records up to date and declare profits earned from property letting as soon as possible.
Enquiries raised by HMRC in respect of undeclared income resulting in unpaid taxes would be subject to much harsher penalties compared to those who make their declarations prior to any such enquiry.
Making use of HMRC’s Let Property Campaign disclosure gives clients an opportunity to bring their affairs up to date and get the best possible terms to pay the tax they owe. AAB can assist with this process.
Why is it important to take action now?
HMRC enquiries can be in depth, and time consuming which can result in significant professional costs being incurred, whether or not there is any actual under-reporting of income or tax loss. Getting in front of an enquiry by making a disclosure is normally a much quicker process than protracted correspondence with HMRC during the process of an enquiry.
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