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NI landlords warned as HMRC targets short-term renters over unpaid tax

Posted By:
Baker Tilly Mooney Moore

23rd Feb 2023

Landlords of short-term rental properties, including Airbnb and Booking.com hosts, risk facing penalties for tax evasion if they fail to report income on their rental properties.

The warning, highlighted by Belfast accountancy and advisory firm Baker Tilly Mooney Moore, comes as HMRC targets short-term landlords in a campaign to stamp out undeclared income from property letting.

Short-term landlords on advertising sites such as Airbnb, Booking.com and Holiday Lettings are under particular scrutiny in the HMRC campaign launched this month.

Under current tax requirements, customers who rent rooms in their own homes do not need to declare their rental income, unless they earn more than £7,500 from the property per tax year. If two people receive income from that same property, this limit drops to £3,750.

Landlords are reminded, however, that this tax relief does not apply to income gained from letting additional properties such as second homes. In these cases, hosts only receive a tax-free allowance of £1,000 per tax year.

In its latest agent update, HMRC says it will use varied information they hold on taxpayers, including details of property rentals, to identify landlords who have earned income from short-term property lettings and not declared it.

In response, Head of Tax at Belfast accountancy and advisory firm Baker Tilly Mooney Moore Angela Keery has warned those renting out property in Northern Ireland to reassess their tax affairs and make sure they are aware of the relevant thresholds and declaration obligations in order to avoid penalties.

Head of Tax at Baker Tilly Mooney Moore, Angela Keery said:

“The rules and limits around income from short-term rentals are very clear, however this move by HMRC to target short-term landlords should serve as a reminder that landlords have responsibility for their own declarations. Anecdotally, we see more and more people coming into the rental market as landlords, so many who are new to it or are only renting one additional property may have a limited knowledge of their obligations. The launch of the HMRC campaign is a good time for customers to get their tax affairs in order, and ensure they aren’t at risk of facing a penalty down the line.”