Whether you let a whole property on Airbnb, a room in your home, or run serviced accommodation, the income is taxable and needs to be reported to HMRC. Airbnb and other platforms now share host earnings with HMRC, so it is more important than ever to get this right.
Do you need to register your holiday let with HMRC?
If your income from letting is more than £1,000 a year before expenses, you need to tell HMRC. The first £1,000 is covered by the property allowance. Above that, in most cases, you report the income on a self assessment tax return.
- New to self assessment? Register with HMRC by 5 October after the end of the tax year in which you started letting. For example, if you started in June 2026, the tax year ends on 5 April 2027, so you register by 5 October 2027.
- Already file a tax return? You don't register again. You add the rental income to your return.
- Let through a limited company? The income goes in the company's accounts and corporation tax return instead.
HMRC already sees your earnings. Since 2024, Airbnb and other platforms have to report hosts' income to HMRC each year. If you've let without telling HMRC, it's better to come forward yourself before HMRC contacts you. Penalties are usually lower when you tell HMRC first.
The end of the furnished holiday lettings rules
From 6 April 2025, the special tax rules for furnished holiday lettings were abolished. Holiday lets are now taxed in the same way as other residential lettings. In practice this means:
- Mortgage interest and finance costs now get relief at 20% only, if you own the property personally
- Furniture and equipment are no longer claimed through capital allowances, but replacements can still be claimed
- Holiday let profits no longer count as earnings for pension contributions
- Different capital gains tax reliefs now apply when you sell
Allowances that may help
- Rent a Room Scheme: up to £7,500 a year tax-free if you let furnished accommodation in your own home
- Property allowance: up to £1,000 of property income a year tax-free, for very small amounts
Which option is best depends on your income and expenses, and they can't always be combined. I work out which saves you the most.
VAT on serviced accommodation
Short-term accommodation is usually standard-rated for VAT. If your income from serviced accommodation goes over the VAT registration threshold, you may need to register and charge VAT. This catches out many growing hosts, so I monitor it for you.
What I do for Airbnb and holiday let hosts
- Bookkeeping that matches your platform payouts, cleaning, fees and running costs
- Self assessment, or company accounts if you let through a limited company
- Making Tax Digital quarterly updates
- VAT registration and returns where needed
- Advice on the right structure as your portfolio grows
Talk it through
Book a discovery call. We'll look at your properties and what you need, and you'll get a proposal with a fixed monthly fee before you commit to anything.
Book a discovery call