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TODAY'S OTHER NEWS

Are HMRC and Airbnb about to go to court over taxes?

The BBC is reporting that the short lets giant Airbnb has been contacted by HM Revenue & Customs about its tax liabilities.

An increasing number of Airbnb short lets are managed by lettings agents or specially-formed short let management companies.

A report on the BBC’s UK news website says: “A note in newly filed accounts for Airbnb UK said it had been contacted by HMRC over ‘tax laws or regulations impacting the company's business’.”

Elsewhere in the filed accounts Airbnb says: “The company is also subject to tax inquiries and proceedings concerning its operations and intra-company transactions … Some of these matters may result in litigation.”

The BBC says Airbnb operates two UK com,panies: one is Airbnb UK, which markets and supports the business, and the second is Airbnb Payments UK, which processes payments between Airbnb hosts and guests outside the US, China and India.

The corporation adds that in the last financial year Airbnb UK paid tax of £146,059 on profits of £455,076 and a £14.2m turnover. The payments arm had a turnover of $353.7m (£273.2m) but it only made a $1.5m profit and paid tax of $303,823.

In a statement to the BBC, Airbnb says: "We follow the rules and pay all the tax we owe in the places we do business. That is true as rules apply today and will remain true for whatever rules apply in future.

"The Airbnb model is unique and boosted the UK economy by £4.2 billion last year alone. The vast majority of money generated on our platform stays with hosts and local communities, which makes Airbnb fundamentally different to companies that take large sums of money out of the places they do business.

"As with many other companies, these are routine checks and we are working closely with HMRC."

The BBC quotes George Bull, senior tax partner at accountancy firm RSM, as saying: "Nobody is saying that Airbnb has done anything wrong. The law is complicated, they have to decide how they are going to file their tax returns, they may do it on a basis that HMRC doesn't like.

"However, the phrase 'This may result in litigation' sounds quite serious. It sounds as though Airbnb is expecting a big tussle with HMRC to get these figures across the line."

He adds: "The UK company has a turnover of £14m and it pays tax of around £200,000, so people are saying, 'How can this be? Why are the figures so out of kilter?’ The answer goes back to the 1920s. These basic tax rules for these companies are decades old and they really haven't kept up with the growth of the digital platforms.”

You can see the full BBC report here.

  • Kristjan Byfield

    'The Airbnb model is unique and boosted the UK economy by £4.2 billion last year alone.' This makes me laugh. They haven't brought new tourists and contracted employees to the UK just facilitated a new accommodation model. These people would have rented a hotel or apartment had AirBNB not existed- and most of that would have been through regular UK businesses and private landlords paying the normal rates of tax. It's long time the UK woke up to the tricks fo these big operations and clamped down fast & hard- otherwise all they are doing is encouraging this business model to expand depriving the UK of more and more tax every year!

    Paul Barrett

    Totally agree got a fraudster LL letting to AirBnB on my flat development.
    It is in breach of the lease to let other than on AST.
    The occupant I was talking to of one of the flats gas the AirbnB booking for two months!!!!!
    She also happens to be a landlord!!!!
    Mass fraud is occurring with AirBnB.
    I know of no flat freeholders in the whole of the UK that allow leaseholders to let to Airbnb.
    Plus I doubt the block insurance covers things.

     
  • icon

    AirBnB the company may well pay taxes in a diligent manner, but you can bet your cotton socks that many owners who use AirBnB to market their properties do not.

  • S l
    • S l
    • 23 October 2019 14:33 PM

    are hmo properties allowed to rent out to families or air bnb. i would have thought not as they would have lose their hmo licence

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