Four Self Assessment Tax Tips for Hosts on Airbnb
As a Host on Airbnb, preparing for tax season and understanding your tax obligations is an essential responsibility. To help you file your Self Assessment tax return, we’ve asked our partners at TaxScouts to share their top tips and resources.1
Tip 1: Know your taxes
Here are the main taxes you need to be aware of:
Rental Income Tax
Income Tax is a tax you pay on your regular earnings.
As a Host on Airbnb, you pay Rental Income Tax. Your income tax band is determined based on your regular income plus any rental income earned from hosting, minus your expenses (e.g. the costs you incurred hosting your property).
UK Income Tax Rates 2023/24
| Income (incl regular + hosting income) | Tax rate | Tax band |
| Up to £12,570 | 0% | Personal Allowance |
| £12,570 – £50,270 | 20% | Basic rate |
| £50,271 – £125,140 | 40% | Higher rate |
| £125,141 + | 45% | Additional rate |
Use TaxScouts’ Rental Income Tax calculator to estimate what you might owe.
You can check the current Scottish Income Tax rates for 2023/2024 here. From 6 April 2024, Scottish Income Tax rates will be changing as a new tax band is introduced.
National Insurance
For the 2023/24 tax year, you have to pay Class 2 National Insurance on your rental income if:
- HMRC decides you have a property business
- Your profits are over £6,725
From the 2024/25 tax year, Class 2 NI is scrapped completely.
If you make more than £12,570, you’ll have to pay Class 4 National Insurance.
Capital Gains Tax
You have to pay Capital Gains Tax (CGT) if you sell the property you host on Airbnb for a profit, unless:
- Your capital gains are under £6,000 (for the 23/24 tax year)
- The property you are selling is your main residence
There are different tax rates of CGT for 2023/24.
| Total annual income | CGT rate (applies to your entire profit) |
| Below £50,270 | 18% |
| Over £50,000 | 28% |
Estimate what you might owe using the TaxScouts Capital Gains Tax calculator.
If you sell your UK property and owe CGT, report the tax you owe and pay your bill by:
- Using HMRC’s real-time Capital Gains Tax service
- Within 60 days of selling a property from 27 October 2021 onwards
- Within 30 days of selling a property between 6 April 2020 and 26 October 2021
- Filing a Self Assessment tax return (in the tax year after you sold) if you have other income or gains to report
- E.g. If you sold a property in the 2022/2023 tax year, you have to report it in your 2023/2024 tax return
Missing these strict deadlines may result in considerable penalties and interest payments.
VAT
You’ll have to register for and pay Value Added Tax (VAT) if your earnings from hosting on Airbnb are more than £85,000 in a tax year.
Council tax
If your property is only available as a short-term let (e.g. a listing on Airbnb) for less than 140 days per year, then you’ll be responsible for paying the council tax on the property.
Business rates
Business rates are taxes you need to pay for the premises you work or make money from, like the properties you host on Airbnb. If you pay business rates, you won’t pay council tax.
Tip 2: Use your allowances and reliefs to be more tax-efficient
You could be eligible for a few allowances and reliefs that’ll help reduce your tax bill.
- Rent-a-Room scheme: Earn up to £7,500 in rental income per year tax-free from letting out part of your own home
- If you earn £7,500 per tax year or less from renting out a room in your house, you don’t need to report it to HMRC
- Property Income allowance: Earn up to £1,000 tax-free in rental income
- Trading allowance: Claim £1,000 tax-free in self-employment income
Whatever rental income you’ve earned after one of the above allowances is applied, combined with your regular income (from a job, self-employment, etc.), is what determines your Income Tax band and rate.
- If the property you list on Airbnb counts as Furnished Holiday Let (FHL), you can reduce your Capital Gains Tax (and ultimately your tax bill) by claiming these specific tax reliefs.
- Entrepreneur’s Relief: If you sell your property, you’ll pay less CGT on any profits you make
- Rollover Relief: Defer your CGT when selling your existing, and buying a new, FHL
- Small Business Rate relief: contact your local council to see what relief you’re eligible for
- Capital allowances: Claim back relief for buying furniture, fixings, and equipment
- Pension contributions: Make bigger tax-free contributions to your pension
Tip 3: Claim your expenses
Hosts on Airbnb can deduct a variety of “allowable expenses” from their earnings, which can help to lower your tax bill.
Here are some of the hosting expenses you may be able to claim:
- Landlord’s insurance
- Cleaning and gardening services
- Your accountant and/or legal fees
- Marketing costs
- Rent, ground rent and service fees
- Letting agent fees
- Gas, electricity and water
- Mortgage interest
- Other utilities
Tip 4: Know your deadlines to avoid HMRC’s fines and penalties
The tax return filing and payment deadline is 31 January the year after the tax year you’re filing for.
So, if you’re sorting your 2022/2023 tax return, you need to file and pay your tax bill by 31 January 2024.
What happens if you miss the deadline?
Late filing penalty
If you owe tax because of your earnings as a Host on Airbnb and need to file a return but miss the deadline, you’ll receive an automatic £100 penalty from HMRC – whether or not you owe tax. HMRC also adds more fines on top, depending on how late you file.
Late payment penalty
You may have filed your tax return, but it’s also important to remember to pay your tax bill by midnight on 31 January the year after the tax return you’re filing for.
So, for your 2022/2023 tax return, you have to file and pay your tax bill by 31 January 2024.
If you don’t, you’ll need to pay late payment penalties.
Additionally, you’ll also pay interest on any late payments. Currently, it’s 7.75% (since Aug 2023). Here’s the full list of late payment and interest rates.
Next steps
There are a range of cases which will require you to file a Self Assessment tax return.
To view your Airbnb earnings, visit your Transaction History page.
If you’d like support calculating, understanding or filing your tax return, you can contact TaxScouts. Hosts on Airbnb can claim a 10% discount on their first TaxScouts tax return or tax consultation. Offer expires 31 January 2024.