These apply to England, Wales and Northern Ireland. The rate of tax you’ll pay depends on which tax band you fall under – 20% for basic rate, 40% for higher rate and 45% for additional rate. HOW MUCH TAX DO I HAVE TO PAY ON AIRBNB INCOME?Īnything above your Personal Allowance once you’ve deducted any reliefs is taxed just like other types of income. You can use software like GoSimpleTax to keep track of your income and expenditure throughout the year, and then use this information to complete and submit an accurate tax return straight to HMRC. Remember that all your non-PAYE earnings must be included and submitted as part of your Self Assessment tax return.

Anything exceeding it will be liable for Income Tax. In any other case, you count the Airbnb earnings on top of your earnings elsewhere, using the Personal Allowance threshold of £12,500. If you’re letting jointly (for example, with a partner or friend), then it’s £3,750 for each of you. To qualify, you must only rent a single furnished or unfurnished room, and the property has to be your main residence.Īs of 2020/21, the government’s Rent a Room scheme means you don’t have to pay tax on the first £7,500 you earn from this rental every tax year.

However, you may have a separate tax-free allowance from your main income if you rent a room on Airbnb.

They’re added to your total taxable income, and it’s all taxed together. DO I HAVE TO PAY TAX ON AIRBNB INCOME?Įveryone is entitled to earn a certain amount of money tax-free, but must pay tax on any income that exceeds their ‘Personal Allowance’ (currently set at £12,500 as of 2020/21). This article provides the guidance you need to stay in the taxman’s good books. These have tripped up more than a few Airbnb hosts over the years. Yes, renting out your property when you’re not using it can be a great way to make a quick buck – but there are tax rules you need to be aware of. Anyone with a spare room can make money by letting someone stay in their home for a night or two – and playing host on the platform can prove to be a money-spinner in the long term. Airbnb is the go-to place for affordable holiday accommodation.

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