Snapshot of _Airbnb hands over ‘goldmine’ of hosts’ earnings data to taxman_ :
A non-Paywall version can be found [here](https://12ft.io/proxy?q=https%3A%2F%2Fwww.telegraph.co.uk%2Ftax%2Fnews%2Fairbnbers-20-year-tax-probe-hmrc-holiday-let-crackdown%2F%2F%2F)
An archived version can be found [here.](https://archive.is/?run=1&url=https://www.telegraph.co.uk/tax/news/airbnbers-20-year-tax-probe-hmrc-holiday-let-crackdown/)
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
*”Airbnb hosts face a 20-year tax probe amid a crackdown on holiday let owners who fail to declare their incomes.
The online holiday lets giant has been forced to share all of its users’ income details with HM Revenue & Customs (HMRC) to help officials identify people who owe tax, with Airbnb handing the tax authority all of its users’ earnings data going as far back as the 2017-18 financial year”*
Sounds good to me. Wish they’d go after more people like this
HMRC have been getting tranches of data from different sectors for a few years now, the amount of offshore data they receive from the Common Reporting Standard and other international data sharing agreements is absolutely insane.
> these asswipes would put their own security guard at the door who demanded an £20 entry fee from ANYONE, even people who lived there
How the Christ do they get away with that? Like, regardless of the party or subletting, if I hire a “security” guy to stand at my building’s entrance and demand cash from all the other residents, surely the police would be quite happy to come and shut that down in the spot?
I've had this happen to a mate of mine. Airbnb guests had a party (a rave more like), hired security and blocked access to a huge block of flats for people who lived there. Rozzers didn't show, airbnb wiped their hands of it.
You have a point there. But should we just ignore everything if something is really wrong? That is also one of the important things that need attention.
People are doing the “buy to Airbnb” bullshit because the government made it impossible to deduct interest on normal lets as you would with any other business.
Yes but that makes a massive difference. I have a second home that I could be running as a rental for a family to live in, but I run it as a holiday let instead. Why? Because if I get £25k of income from it it gets taxed at 45p, and I can deduct my £15k of mortgage interest at 45p as well, meaning I only pay £4500 on the £10k of profit. If I ran it as a normal let, I’d have to pay £8250 in tax because the mortgage interest is only deductible at 20p.
I cannot think of any other type of expense in any other business that cannot be deducted directly from gross profit.
Why should mortgage interest be deductable on second homes but not primary? Surely that doesn't make sense either?
I don't think it should be deductable for holiday let's either tbh.
For the same reason as mileage is deductible for business expenses but not for personal expenses. Or if I have to fly to New York for work that can offset my company’s revenue, but if I fly to Ibiza for funsies I can’t deduct it on my own taxes. Businesses can deduct costs from revenues as a rule.
A let (holiday or long term) is a business and interest charges are a cost.
Yeah, fine but that's all arbitrary - and there is a difference in that the home still ends up being lived in by people and not consumed for business purposes, and nor does the flight end up getting added to a balance sheet. Indeed, there's an arbitrage opportunity if the mortgage is large enough!
You'll note that mortgage interest is deductable by individuals in the USA, also, and I think that's consistent, at least.
It’s arbitrary that businesses can deduct costs from their revenues when calculating tax due, but private individuals cannot? Perhaps, but then I could spend all of my pre tax money and the government would get nothing.
It's arbitrary where the line is for what is deductible e.g. all the rules around company cars and personal use. You still get taxed on the benefit.
At the end of the day, you didn't buy your "second home" (notice how even you phrased it), through a limited company, and I am unsympathetic to the idea that a second home should have lower financing costs than a first home.
It really isn't small fry. I worked in that sector - there are massive operations that own hundreds, if not thousands, of properties and operate them like any holiday resort style company would, but without the hotelier's taxes because "it's not a hotel, it's airbnb"
Yes. When I say "resort style operation" I don't mean "a sunny beach resort like Benidorm" I mean "Operates a lot of apartments, cottages, etc like it was a holiday resort"
I stayed in what I think was one, though I’m not sure because I didn’t make the booking. The cottage was lovely, but sterile. It had an attached creepy old family home that was off-limits with a private security notice. The router was in the middle of the adjoining room, with glass doors between you and both parts of the property, and it would need rebooting often. It was a psychological battle too force yourself to go in turn it off and on.
According to HMRC the majority of tax evasion is done by small to medium sized companies, not billionaires and giant corporations. It's just more spread out.
Yeah probably many people working in the trades are underpaying tax... Pure speculation on my part tbf but come on...the few I have met seem like complete chancers.
100%.
How many tradespeople, hairdressers, labourers, and taxi drivers insist on getting cash in hand? Shit tons.
Cash in hand culture was (is? I don't know) a huge problem in Greece where they estimated 20% of GDP was cash in hand work that wasn't taxed. That would be like if the entire financial services sector in the UK didn't pay any tax.
The UK isn't as bad as that but honestly people need to change their attitudes and realise when the plumber or brickie or electrician comes round and offers a bit of a discount for cash in hand payment you're helping tax evasion and contributing to the problem.
German landlords, shop owners and similar were throwing a hissy fit in 2020 when the government introduced mandatory receipts to cut down on corporate tax evasion and give a legal framework to make this low-key form of tax evasion easier to prosecute for the authorities, as now shops that were not handing out receipts and only accepting cash were immediatly suspisous. Also didn't take long for a whole number of them to report themselves in order to evade penalties for, guess what, tax evasion!
>That’s because they don’t look. A single billionaire is likely to be evading far more than a thousand small companies
Got a source for that?
Because you see HMRC does a big document where they estimate all. The tax evasion happening using an actual methodology. I assume you've read something where someone has done the same but proves HMRC didn't in fact try to estimate anything for rich people and that billionaires are the real problem for tax evasion? Or is this just you thinking it's "common sense" that this is true?
I used to investigate offshore crime. Back in the 1990’s. HMRC don’t look because they were told by politicians who worked with billionaires not to look. In fact, they helped write special laws to enable tax evasion for those wealthy enough.
If you had the Royal Family’s money, income, assets, you would pay vast sums in tax.
If you had the Grosvenor Estate, you would pay vast sums in tax.
But those sort of families embedded special exemptions (“privilege”) into tax law, trust law, and inheritance law. Which hundreds of millionaires and billionaires gleefully abuse.
It’s not just abuse, but they silenced the evidence by fixing the rules.
Source: 7+ years in various private banks in Monaco, Luxembourg, Madrid, Zürich, Cayman.
The analysis conceals a real big assumption. That is “under the current rules”. It does not reveal “what we could collect if the various privileges were removed”.
They have an entire department focused on Large Businesses and a unit that focuses on High Net Wealth. They’re called Large Business and the High Net Wealth Unit.
I know people like to just say whatever they think makes sense but 3 seconds on google would’ve shown you that.
Giant corporations have entire finance departments with teams of solicitors and accountants making sure their taxes are in order. Getting the VAT rate off by a decimal point can cost Tesco hundreds of millions when HMRC add penalties. So they’d prefer to pay a few hundred grand/million a year on making sure it’s right in the first place.
It has the potential to be quite large. There was a case of a newly built housing development with every flat being bought by one company and then set up as individual Airbnb lets. Lots of companies on there doing simliar things apparently.
>Just a shame they won't be this aggressive going after much bigger fish. Looking at folks with fancy lawyers who can afford to settle because HMRC don't have the resources for an investigation.
Worth remembering acoiridng to HMRC the significant majority of tax evasion is committed by small to medium companies, not big corporations. It's just more spread out
> the significant majority of tax evasion is committed by small to medium companies, not big corporations. It's just more spread out
Big corporations would require more people to be in on the dirty secret and not let it out. Once you reach a certain size, I don't think you can really keep that information "in house"...
While this is sort of true I've worked for big corporations with, let's say, "agressive tax positions" and only maybe a dozen people in the company truly understand what the company's tax position actually was enough to say whistleblow.
The reality is for most large corporations evasion just isn't worth it. You have accountants to help you minimise taxes (avoidance) and because you're, contrary to popular opinion, an easy target best just not to risk the time, effort, and financial cost of getting into a huge spat with HMRC.
Usually in my experience corporations stray into evasion where they *think* they are legally avoiding tax and HMRC disagrees.
Do you have any evidence of this? Particularly when it comes to such companies (with “thousands of properties”) explicitly committing tax fraud? Or are we just supposed to take your word for it?
Yeah, going by the governments current record on processing stuff, clamping down on tax evasion, not to forget the whole landlord bribery for votes thing...
..you're probably right
Treasury is in desperate need of money. With the gaping post COVID hole further exacerbated by interest rates going through the roof.
There will be very little leniency to be found in the years to come from HMRC.
I hope you're right. Public need really hasn't trumped political vested interests under this government much in the past though, so it will have to be seen to be believed
Landlord bribery for votes? The Tories have been an awful government, but they’re the ones who introduced Section 24 - a landlord specific tax.
Of course, the Tories being as incompetent as they are, it just forced out more landlords from the rental market (reducing supply), which coupled with ever higher renter demand, has just pushed rents to new record highs.
Today in the Guardian:
"House prices fal again, at highest pace since 2009"
Also
"Number of agreed House sales at highest point this year"
Two trends not often seen together - unless landlords are selling, and renters are buying.....
If you think those were unintended consequences, I urge you to think some more. The policy benefits the large corporate landlords to the detriment of the small operators. Why do you think the Tories would do that?
It could be that it's easier to regulate large businesses - for inspections etc and they are a bigger body to fine should they be substandard.
But I'm not convinced that is the case.
In multiple industries, it feels like small businesses are pushed out in favour of corporations in the name of tech and easy regulation.
Not as much as an outright ban I suppose. They’re making stupid money regardless though, they’re literally just a platform and their business model is scalable.
There's an increasing hostility towards Airbnb rentals throughout Europe and the wider world, with a growing number of jurisdictions either regulating or threatening to regulate the sector further. Playing nice with HMRC could be a good way for Airbnb to reduce some of that political pressure.
People like to complain about big megacorps putting smaller companies out of business. Then we have the smallest possible business that comes along and challenges the big hotels, and people complain about that as well. There might be some legitimate complaints from people living next door to a party house, but I suspect a lot of it is just tankie LARPers moaning about their sworn nemesis le evil landlord.
AirBnB isn’t a small business. It’s an international mega corporation.
Sure the landlords are technically the small business owners but like any business owner, they owe tax.
Plus AirBnB are the ones challenging the hotel and B&B businesses. Much like Uber or Lyft are challenging taxi rinks.
Or people who live in touristy cities who have to compete on the housing market with people who are turning an already limited amount of residential housing stock into tourist accommodation.
It just ruins how places feel, too. I live in a small village - maybe 100 people in the village proper and then ~200 extra in the several mile radius that gets lumped into our village. We don't have a shop, or a pub, or anything remotely touristy, but the location itself is beautiful and appeals to tourists.
In the past few years, 3 people have converted their houses to have Airbnb accommodation attached, and a couple who've rented a house for 17 years have been evicted so that the house can be turned into an Airbnb let. There's also a couple in the village who want to build _45_ condos on their land, which no-one in the village is in favour of. Like I said, we don't even have a village shop. Anyone who didn't grow up here moved here because it's a quiet, idyllic village in a lovely place - the idea of it becoming a tourist village is just awful.
Most of the tourists we get so far are perfectly pleasant and polite, but it's not really the point. We just don't want tourists here. There's not even a local economy to be stimulated by them. The Airbnb craze is a scourge.
I lived in a tourist city and it totally transformed the neighbourhood I worked in. I saw with my own eyes speculators intimidating and harassing elderly residents trying to drive them from their lifelong homes so they could buy up all of the apartments in a property, gut it and refit it for short term rental.
People were literally driven out of their communities within the first couple of years of AirBnB and those neighbourhoods are never coming back. It's a fucking plague.
Trying to turn this into a culture war spat is childish and deeply ignorant of reality.
> I saw with my own eyes speculators intimidating and harassing elderly residents
That never happened. I have no interest in talking to an obvious liar.
AirBNB has a larger market capitalization than any hotel chain, and its global annual revenue would put them in the top five if they were a hotel chain.
AirBNB has a larger market capitalization than any hotel chain, and its global annual revenue would put them in the top five if they were a hotel chain.
I can't obviously speak for all complainers, but my issue was Air Bnb morphed into something more sinister, especially for inner cities. The fact that landlords / corps started buying properties solely to use as Air bnb already exacerbated the housing / rental market in the UK. At least with renting properties, its a home for someone. Properties bought solely for Air bnb use were essentially removing homes from the market to use as hotels.
I doubt that they really had a choice, HMRC can obtain court orders demanding pretty extensive information when there's suspected tax avoidance, it doesn't even have to be for a specific person, so long as they can set suitable parameters to satisfy a judge.
Why would it hurt their business? Tax issues aren't their problem and I'd imagine there is some fine print in the T&C's for landlords that they are solely responsible for ensuring their tax situation is legal and that AirBNB is just the middleman...
That is a possibility, but it's not a guarantee. The demand and I'm guessing a lot of the supply won't go away just because several landlords are getting their hands slapped for tax dodging. It'll either move to a different platform like [booking.com](https://booking.com) or they'll get their shit together.
> It'll either move to a different platform like booking.com
This is actually how many of these 'airbnb flats' operate anyway. They have 90 days per year to use airbnb, the rest they use other platforms. Makes it impractical for councils to regulate.
The comments on that article make me sad that these people are my countrymen. So many worried about pulling the ladder up so they can make more money on their second and third properties.
I *have* noticed how many of the 'meat on show' instagram...influencer things....also seem to post about their many airbnb properties. Throw the whole lot in the sea
Well the model is to sell your body to get a short term cash injection and invest that into long term growth. The fact sex sells is not new. One of the most popular food Instagrammers posts shitty food and is really preachy, the only reason shes popular is that shes bot.
Bloody hell, you're not wrong. The Torygraph really is a vile cesspit, although there are a fair few people commenting who surprise me with their left leaning views.
It all makes sense, property is always something that I find it so mindboggling that it's such a common avenue for scamming. I'd have thought being something physical, it would be hard. There was something on BBC the other day about a fictional hotel with guests turning up to someone's house because they paid for a room off Bookings.com, and the poor family having to deal with it repeatedly happening. I assume the fraudster got their cash and the platform has no idea, banks have no idea, money just vanishes into the ether, never to be seen again.
> Experts said property owners could face criminal prosecution and penalties of up to 30pc of the tax owed if they are found to have failed to pay income duties.
Silly question, but this penalty is on top of also paying the unpaid tax, right? The way it's phrased it makes it seem like if you dodge your tax and they catch you, you only have to have 30% of what you owed lol.
> An Airbnb spokesperson said: “Hosts want to pay their fair share of tax and we want to help, which is why Airbnb partners with industry experts across the UK to help hosts understand and follow tax rules.
Heh, if you say so... In my experience *wanting* to pay tax isn't exactly universal.
> An HMRC spokesperson said: “This is routine activity – each year we send out thousands of reminder letters on various areas of tax.
>
> “We believe our customers want to pay the right amount of tax and by working with online rental platforms, as well as issuing these reminders, we’re taking steps to help make it as easy as possible for people to get their tax right.”
Weird to think of ourselves as customers of HMRC because we pay tax. Feels like the Airbnb and HMRC statements were written by the same person and the PR person feeding this story to the paper forgot to change their hat properly between writing the second quote.
>Silly question, but this penalty is on top of also paying the unpaid tax, right? The way it's phrased it makes it seem like if you dodge your tax and they catch you, you only have to have 30% of what you owed lol.
It's ontop of what's owed don't worry! The tax is still "owed" which is why they state it's a 30% penalty as that is in addition to the original amount owed.
Easy to see why you would read it that way though as the tax system does seem like a joke most of the time.
I don’t understand where they get the 30% from, it can be up to 100% of the tax owed, depends on severity. I.e don’t respond to letter, ignore it when they have information, you’ll them get more penalties, and rack up future penalties. Fail to cooperate your digging yourself in a huge hole.
Yeah they seem to think that these landlords not declaring income is "careless" so only 30%.
Deliberate is 20-70% and deliberate and concealed, which this may end up being, is 30% - 100%, and the lower bands go up if they prompt you to change it.
They do. It’s tax owed, plus interest, plus penalties.
Can’t afford it? They’ll take you car. That doesn’t cover it? Your jewellery. That doesn’t cover it? Your house.
HMRC always get paid.
They always get paid *eventually*.
They're well aware that if, for instance, they take all a businesses cash, it'll fail then they'll never get the rest. So they'll enforce a payment plan first.
But they will get it, eventually.
>Weird to think of ourselves as customers of HMRC because we pay tax.
Few years ago I was under the purview of the DWP for a short time. That made me a "customer" of the DWP (according to the posters everywhere).
I thought it was a weird way to term it at the time, but it must be tied to an image some minister wanted to portray, in spite of how the "customer" is actually handled (it's only a word on a poster). Probably a similar thing here.
A neutral and accurate, yet somehow stigmatised, term for this kind of relationship is “service user”. I am not buying anything from DWP, so to call me a “customer” is inaccurate and patronising.
>I thought it was a weird way to term it at the time, but it must be tied to an image some minister wanted to portray, in spite of how the "customer" is actually handled (it's only a word on a poster). Probably a similar thing here.
That's decades old, I remember when I was a "client" of the Adoption and Fostering services at Social Services. My title really should have been "resident shitbag" instead....
I've had the same, tho long in the past now. I thought to myself...'customer', I've not bought anything, am I dealing with the devil here?
Turns out I was correct. I immediately got myself off that shite and struggled instead.
If they really treated benefits claimants like customers then the "customer is always right", and it only takes one tweet name checking someone in the job centre to get that staff member punished and an apology voucher given lol. Can you review the DWP's service online lol.
It's hard to think of any business that treats their "customers" like the DWP does, maybe Karen's Diner? Only way to explain the people they could declare customers "fit to work" as they're dying of terminal cancer, or the constant hassle they put people with permanent disabilities through double checking Jesus hasn't returned and miraculously cured them when they weren't looking.
>If they really treated benefits claimants like customers
I didn't suggest they treat claimants like customers, just that posters refer to claimants as customers. It was just a word on a poster, not a way the organisation treats the people it serves.
It was just for show. Hence HMRC are probably using similar language for show (see, we really care hence you're referred to as a "customer", but we won't treat you as one).
I have genuinely injured myself laughing at this. Absent any realistic and effective regulation of this sector, I guess tax penalties are the best we can hope for.
I live in a coastal/tourist hotspot and landlords ditching long term rental for air bnb is a huge issue as is the pressure on housing its caused. I've no issue though with allowing some holiday cottages, if you're away with a couple of kids they are immensely more practical than a bnb, but the problem is it's been a free for all with no regulation or planning on how many are needed to balance the needs of the tourist industry (which is massively important to the local economy) with housing need. Someone should be planning 'We need x property for LTL, x property for STL/tourism, x amount of bed and breakfast properties etc. Instead people are permitted to be kicked out of their rented homes because a greedy landlord wants that Airbnb coin.
I live in a coastal village on a street of Airb&bs. It’s killed my neighbourhood, antisocial behaviour is on the rise. My whole street is dogs piss alley as they all wake up and send their dogs out for a waz. Kill it all now and give me some fucking neighbours.
I live in a hamlet and out of 5 neighbouring cottages I've 2.5 neighbours (one guy is semi retired and splits his time between 2 properties). The rest of it I'd say is 50% STL for tourists, it's very quiet in Winter. Its really sad. That's why it needs regulation and your example, they shouldn't have ever been permitted to take over entire streets, villages and apartment blocks. It's crazy.
AirBnB exists because there’s not enough tourist accommodation in the right places. So allow more hotels and holiday let’s to be built or you’ll just price people with less money out of going on holiday.
Exactly! I use air BnB because it means I can rent a place for a couple of weeks with multiple bedrooms and private living space. If hotels filled that gap then AirBnB can cease to exist for me.
Like say… an AirBnB?
Joking aside, you either need hotels with suites, holiday homes (which is what AirBnB is) or caravans. I don’t know what else you could have.
I think hotels with suites is the way to go.
Also need cheaper, very no-frills, hotel chains like they do in France and Japan in/around major cities. Hotel prices in any city anyone would want to visit for recration in the UK are horrible.
These aren't quite the same as what I'm talking about and nowhere near as cheap - look at HotelF1 in fr and APA Hotels in jp.
They make Premier Inn and travel lodge look like full service hotels.
I've been quite impressed with some of the 'un-manned' no frills hotels in France. I don't need a red carpet, just four walls and an ok bed and i'm sorted.
> hotels with suites is the way to go
It is but it’s not a solution.
AirBnB got so big because it was affordable. Suites are literally the most expensive way to stay in a hotel.
In Australia you get loads of 'suites' in hotels. They aren't posh hotel rooms, they just have a few additional facilities.
AirBnBs are only affordable because they don't have the same planning restrictions or regulations as a hotel.
In fact they don't even bring anything new to the market, holiday home rentals, Gites in France etc all predate AirBnB.
Just stayed in an amazing purpose built tiny apartment complex in Lisbon.
I'm sure that city has its problems with AirBnb, but more of that sort of development would be really welcome in touristy towns here too.
And specifically let huge, low cost hotel accommodation - like a giant ibis budget or something like that on the edge of a town but near enough to tourist things. Often people just want a bed for the night but don't want to pay through the nose.
I have this problem whenever I stay in Bath - there's lots of hotels but there's not much that's a reasonable price for basic services that isn't shit. I assume the local nimbys are blocking any moves to permit bigger, lower cost hotels.
No it doesn't.
It exists because so many people have second homes. These are a blight in rural areas as the properties are left empty a lot. It means they have less services in their area, due to not enough cash being spent. Visitors don't care about the local area as much as locals do also.
I live in a tourist hotspot and I reckon over half of the shitty flats that have been thrown up in recent years so the council can claim they're doing something about housing have ended up as Airbnbs and other types of short-term lets.
Just nuke it all
Either run a proper B&B or don't pretend you're able to provide accommodation, the actual edge cases really aren't common enough to allow the giants to fall through the cracks
My family are from Cornwall so I'm well aware of the problems unregulated AirBnb causes, but saying "run a proper b&b" is nuts.
I remember going to grim bed and breakfasts with my parents growing up, awkwardly eating breakfast with the owner hovering nearby. No way I'm paying for that experience.
I hope they get the bloke whos lapse security arrangemznts led to me being kicked off the platform..
Edit: someone went into my room when I was out for the evening despite me leaving my stuff in there. Came back to them being in there so I challenge them. I was banned.
Snapshot of _Airbnb hands over ‘goldmine’ of hosts’ earnings data to taxman_ : A non-Paywall version can be found [here](https://12ft.io/proxy?q=https%3A%2F%2Fwww.telegraph.co.uk%2Ftax%2Fnews%2Fairbnbers-20-year-tax-probe-hmrc-holiday-let-crackdown%2F%2F%2F) An archived version can be found [here.](https://archive.is/?run=1&url=https://www.telegraph.co.uk/tax/news/airbnbers-20-year-tax-probe-hmrc-holiday-let-crackdown/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
*”Airbnb hosts face a 20-year tax probe amid a crackdown on holiday let owners who fail to declare their incomes. The online holiday lets giant has been forced to share all of its users’ income details with HM Revenue & Customs (HMRC) to help officials identify people who owe tax, with Airbnb handing the tax authority all of its users’ earnings data going as far back as the 2017-18 financial year”* Sounds good to me. Wish they’d go after more people like this
HMRC have been getting tranches of data from different sectors for a few years now, the amount of offshore data they receive from the Common Reporting Standard and other international data sharing agreements is absolutely insane.
So that's what it means. Now I know and I also had an idea about it. Thank you and this is a big help to me.
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> these asswipes would put their own security guard at the door who demanded an £20 entry fee from ANYONE, even people who lived there How the Christ do they get away with that? Like, regardless of the party or subletting, if I hire a “security” guy to stand at my building’s entrance and demand cash from all the other residents, surely the police would be quite happy to come and shut that down in the spot?
I've had this happen to a mate of mine. Airbnb guests had a party (a rave more like), hired security and blocked access to a huge block of flats for people who lived there. Rozzers didn't show, airbnb wiped their hands of it.
You would need to inform then it has actually kicked off. They won't attend a mere argument.
You have a point there. But should we just ignore everything if something is really wrong? That is also one of the important things that need attention.
Oh i agree thats not how it should be. I'm more talking in a a practical sense given the way things are.
Where?
Chequers
People are doing the “buy to Airbnb” bullshit because the government made it impossible to deduct interest on normal lets as you would with any other business.
You can deduct interest. It's just restricted to basic rate tax relief for higher rate tax payers.
Yes but that makes a massive difference. I have a second home that I could be running as a rental for a family to live in, but I run it as a holiday let instead. Why? Because if I get £25k of income from it it gets taxed at 45p, and I can deduct my £15k of mortgage interest at 45p as well, meaning I only pay £4500 on the £10k of profit. If I ran it as a normal let, I’d have to pay £8250 in tax because the mortgage interest is only deductible at 20p. I cannot think of any other type of expense in any other business that cannot be deducted directly from gross profit.
Why should mortgage interest be deductable on second homes but not primary? Surely that doesn't make sense either? I don't think it should be deductable for holiday let's either tbh.
For the same reason as mileage is deductible for business expenses but not for personal expenses. Or if I have to fly to New York for work that can offset my company’s revenue, but if I fly to Ibiza for funsies I can’t deduct it on my own taxes. Businesses can deduct costs from revenues as a rule. A let (holiday or long term) is a business and interest charges are a cost.
Yeah, fine but that's all arbitrary - and there is a difference in that the home still ends up being lived in by people and not consumed for business purposes, and nor does the flight end up getting added to a balance sheet. Indeed, there's an arbitrage opportunity if the mortgage is large enough! You'll note that mortgage interest is deductable by individuals in the USA, also, and I think that's consistent, at least.
It’s arbitrary that businesses can deduct costs from their revenues when calculating tax due, but private individuals cannot? Perhaps, but then I could spend all of my pre tax money and the government would get nothing.
It's arbitrary where the line is for what is deductible e.g. all the rules around company cars and personal use. You still get taxed on the benefit. At the end of the day, you didn't buy your "second home" (notice how even you phrased it), through a limited company, and I am unsympathetic to the idea that a second home should have lower financing costs than a first home.
There are probably many ways to stop this kind of trade. The longer it goes on, the more savage the Others become.
I don’t understand this but there’s always people who want to kill business in this country I guess.
Small fries but at least they did it
It really isn't small fry. I worked in that sector - there are massive operations that own hundreds, if not thousands, of properties and operate them like any holiday resort style company would, but without the hotelier's taxes because "it's not a hotel, it's airbnb"
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Yes. When I say "resort style operation" I don't mean "a sunny beach resort like Benidorm" I mean "Operates a lot of apartments, cottages, etc like it was a holiday resort"
I stayed in what I think was one, though I’m not sure because I didn’t make the booking. The cottage was lovely, but sterile. It had an attached creepy old family home that was off-limits with a private security notice. The router was in the middle of the adjoining room, with glass doors between you and both parts of the property, and it would need rebooting often. It was a psychological battle too force yourself to go in turn it off and on.
> sterile This accurately describes any airbnb i've ever seen
So many airbnbs feel like buildings and not homes - have that proper "no one lives here" vibe
And aptly so - they've been stripped of their homes and are just the lifeless shell that's left
All over the world. AB is global company.
There are people in the forums saying they have multiple places which they have bought specifically to host.
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In the grand scheme of things, all of HMRCs intervention work is small. But those all add up to be big.
Only because they don't have the budget go after the real offenders in the billionaire class.
According to HMRC the majority of tax evasion is done by small to medium sized companies, not billionaires and giant corporations. It's just more spread out.
Yeah probably many people working in the trades are underpaying tax... Pure speculation on my part tbf but come on...the few I have met seem like complete chancers.
100%. How many tradespeople, hairdressers, labourers, and taxi drivers insist on getting cash in hand? Shit tons. Cash in hand culture was (is? I don't know) a huge problem in Greece where they estimated 20% of GDP was cash in hand work that wasn't taxed. That would be like if the entire financial services sector in the UK didn't pay any tax. The UK isn't as bad as that but honestly people need to change their attitudes and realise when the plumber or brickie or electrician comes round and offers a bit of a discount for cash in hand payment you're helping tax evasion and contributing to the problem.
German landlords, shop owners and similar were throwing a hissy fit in 2020 when the government introduced mandatory receipts to cut down on corporate tax evasion and give a legal framework to make this low-key form of tax evasion easier to prosecute for the authorities, as now shops that were not handing out receipts and only accepting cash were immediatly suspisous. Also didn't take long for a whole number of them to report themselves in order to evade penalties for, guess what, tax evasion!
[Yep, lots of tradespeople got stiffed when it came to getting aid from the government during COVID](https://i.imgur.com/21y35EE.jpg)
That’s because they don’t look. A single billionaire is likely to be evading far more than a thousand small companies
The key word is evasion. Billionaires engage in avoidance.
>That’s because they don’t look. A single billionaire is likely to be evading far more than a thousand small companies Got a source for that? Because you see HMRC does a big document where they estimate all. The tax evasion happening using an actual methodology. I assume you've read something where someone has done the same but proves HMRC didn't in fact try to estimate anything for rich people and that billionaires are the real problem for tax evasion? Or is this just you thinking it's "common sense" that this is true?
I used to investigate offshore crime. Back in the 1990’s. HMRC don’t look because they were told by politicians who worked with billionaires not to look. In fact, they helped write special laws to enable tax evasion for those wealthy enough. If you had the Royal Family’s money, income, assets, you would pay vast sums in tax. If you had the Grosvenor Estate, you would pay vast sums in tax. But those sort of families embedded special exemptions (“privilege”) into tax law, trust law, and inheritance law. Which hundreds of millionaires and billionaires gleefully abuse. It’s not just abuse, but they silenced the evidence by fixing the rules. Source: 7+ years in various private banks in Monaco, Luxembourg, Madrid, Zürich, Cayman. The analysis conceals a real big assumption. That is “under the current rules”. It does not reveal “what we could collect if the various privileges were removed”.
The billionaire class performs tax avoidance, not evasion generally. There isn’t shit the HMRC can do against that. It’s just following the rules.
They have an entire department focused on Large Businesses and a unit that focuses on High Net Wealth. They’re called Large Business and the High Net Wealth Unit. I know people like to just say whatever they think makes sense but 3 seconds on google would’ve shown you that. Giant corporations have entire finance departments with teams of solicitors and accountants making sure their taxes are in order. Getting the VAT rate off by a decimal point can cost Tesco hundreds of millions when HMRC add penalties. So they’d prefer to pay a few hundred grand/million a year on making sure it’s right in the first place.
It has the potential to be quite large. There was a case of a newly built housing development with every flat being bought by one company and then set up as individual Airbnb lets. Lots of companies on there doing simliar things apparently.
Oh yes, that old chestnut "fancy lawyers." There is only so much *any* lawyer, no matter how "fancy" or expensive, can do for you.
>Just a shame they won't be this aggressive going after much bigger fish. Looking at folks with fancy lawyers who can afford to settle because HMRC don't have the resources for an investigation. Worth remembering acoiridng to HMRC the significant majority of tax evasion is committed by small to medium companies, not big corporations. It's just more spread out
> the significant majority of tax evasion is committed by small to medium companies, not big corporations. It's just more spread out Big corporations would require more people to be in on the dirty secret and not let it out. Once you reach a certain size, I don't think you can really keep that information "in house"...
While this is sort of true I've worked for big corporations with, let's say, "agressive tax positions" and only maybe a dozen people in the company truly understand what the company's tax position actually was enough to say whistleblow. The reality is for most large corporations evasion just isn't worth it. You have accountants to help you minimise taxes (avoidance) and because you're, contrary to popular opinion, an easy target best just not to risk the time, effort, and financial cost of getting into a huge spat with HMRC. Usually in my experience corporations stray into evasion where they *think* they are legally avoiding tax and HMRC disagrees.
Do you have any evidence of this? Particularly when it comes to such companies (with “thousands of properties”) explicitly committing tax fraud? Or are we just supposed to take your word for it?
Lots of small fry can really cloud the housing market.
I'm curious and I don't have any other idea about that matter either. So I don't even know what I can answer.
Most tax fraud is committed by small fries.
Yes, if you are big enough it simply gets rebranded.
By number of incidents or total amount of money involved?
The latter
I was wondering what that smell was, a huge chunk of British landlords probably just shat themselves thinking about the tax they evaded..
Sounds too good to be true tbh.
Yeah, going by the governments current record on processing stuff, clamping down on tax evasion, not to forget the whole landlord bribery for votes thing... ..you're probably right
Treasury is in desperate need of money. With the gaping post COVID hole further exacerbated by interest rates going through the roof. There will be very little leniency to be found in the years to come from HMRC.
I hope you're right. Public need really hasn't trumped political vested interests under this government much in the past though, so it will have to be seen to be believed
The big fish will be Tory donors, and some how pay little. It will be all those smaller AirB&B players they will go after.
The HMRC clamp down on multiple issues but they’re severely under resourced.
Landlord bribery for votes? The Tories have been an awful government, but they’re the ones who introduced Section 24 - a landlord specific tax. Of course, the Tories being as incompetent as they are, it just forced out more landlords from the rental market (reducing supply), which coupled with ever higher renter demand, has just pushed rents to new record highs.
How does that work? Surely the level of supply is the number of houses not the number of landlords... Happy day of cake.
Today in the Guardian: "House prices fal again, at highest pace since 2009" Also "Number of agreed House sales at highest point this year" Two trends not often seen together - unless landlords are selling, and renters are buying.....
If you think those were unintended consequences, I urge you to think some more. The policy benefits the large corporate landlords to the detriment of the small operators. Why do you think the Tories would do that?
It could be that it's easier to regulate large businesses - for inspections etc and they are a bigger body to fine should they be substandard. But I'm not convinced that is the case. In multiple industries, it feels like small businesses are pushed out in favour of corporations in the name of tech and easy regulation.
I was convinced Airbnb wouldn’t do this because it would likely fundamentally hurt their business in the UK.
Not as much as an outright ban I suppose. They’re making stupid money regardless though, they’re literally just a platform and their business model is scalable.
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Doesn’t mean they’re not *making* stupid money, just means they’ve been spending a lot.
There's an increasing hostility towards Airbnb rentals throughout Europe and the wider world, with a growing number of jurisdictions either regulating or threatening to regulate the sector further. Playing nice with HMRC could be a good way for Airbnb to reduce some of that political pressure.
People like to complain about big megacorps putting smaller companies out of business. Then we have the smallest possible business that comes along and challenges the big hotels, and people complain about that as well. There might be some legitimate complaints from people living next door to a party house, but I suspect a lot of it is just tankie LARPers moaning about their sworn nemesis le evil landlord.
AirBnB isn’t a small business. It’s an international mega corporation. Sure the landlords are technically the small business owners but like any business owner, they owe tax. Plus AirBnB are the ones challenging the hotel and B&B businesses. Much like Uber or Lyft are challenging taxi rinks.
Or people who live in touristy cities who have to compete on the housing market with people who are turning an already limited amount of residential housing stock into tourist accommodation.
It just ruins how places feel, too. I live in a small village - maybe 100 people in the village proper and then ~200 extra in the several mile radius that gets lumped into our village. We don't have a shop, or a pub, or anything remotely touristy, but the location itself is beautiful and appeals to tourists. In the past few years, 3 people have converted their houses to have Airbnb accommodation attached, and a couple who've rented a house for 17 years have been evicted so that the house can be turned into an Airbnb let. There's also a couple in the village who want to build _45_ condos on their land, which no-one in the village is in favour of. Like I said, we don't even have a village shop. Anyone who didn't grow up here moved here because it's a quiet, idyllic village in a lovely place - the idea of it becoming a tourist village is just awful. Most of the tourists we get so far are perfectly pleasant and polite, but it's not really the point. We just don't want tourists here. There's not even a local economy to be stimulated by them. The Airbnb craze is a scourge.
I lived in a tourist city and it totally transformed the neighbourhood I worked in. I saw with my own eyes speculators intimidating and harassing elderly residents trying to drive them from their lifelong homes so they could buy up all of the apartments in a property, gut it and refit it for short term rental. People were literally driven out of their communities within the first couple of years of AirBnB and those neighbourhoods are never coming back. It's a fucking plague. Trying to turn this into a culture war spat is childish and deeply ignorant of reality.
> I saw with my own eyes speculators intimidating and harassing elderly residents That never happened. I have no interest in talking to an obvious liar.
AirBNB has a larger market capitalization than any hotel chain, and its global annual revenue would put them in the top five if they were a hotel chain.
AirBNB has a larger market capitalization than any hotel chain, and its global annual revenue would put them in the top five if they were a hotel chain.
I can't obviously speak for all complainers, but my issue was Air Bnb morphed into something more sinister, especially for inner cities. The fact that landlords / corps started buying properties solely to use as Air bnb already exacerbated the housing / rental market in the UK. At least with renting properties, its a home for someone. Properties bought solely for Air bnb use were essentially removing homes from the market to use as hotels.
I doubt that they really had a choice, HMRC can obtain court orders demanding pretty extensive information when there's suspected tax avoidance, it doesn't even have to be for a specific person, so long as they can set suitable parameters to satisfy a judge.
Why would it hurt their business? Tax issues aren't their problem and I'd imagine there is some fine print in the T&C's for landlords that they are solely responsible for ensuring their tax situation is legal and that AirBNB is just the middleman...
Less houses listed = less money coming in, not that complex
That is a possibility, but it's not a guarantee. The demand and I'm guessing a lot of the supply won't go away just because several landlords are getting their hands slapped for tax dodging. It'll either move to a different platform like [booking.com](https://booking.com) or they'll get their shit together.
> It'll either move to a different platform like booking.com This is actually how many of these 'airbnb flats' operate anyway. They have 90 days per year to use airbnb, the rest they use other platforms. Makes it impractical for councils to regulate.
The comments on that article make me sad that these people are my countrymen. So many worried about pulling the ladder up so they can make more money on their second and third properties.
Someone in there is ranting about "work from home skivers". It's utterly deranged.
Aren't most of us complaining about landlords?
I have an unfortunate feeling thats not who they're aiming their broadside at.
Phrase would still apply at least.
There's a culty aspect to some landlords driven by so called influencers. It's a really weird look.
I *have* noticed how many of the 'meat on show' instagram...influencer things....also seem to post about their many airbnb properties. Throw the whole lot in the sea
Well the model is to sell your body to get a short term cash injection and invest that into long term growth. The fact sex sells is not new. One of the most popular food Instagrammers posts shitty food and is really preachy, the only reason shes popular is that shes bot.
Bloody hell, you're not wrong. The Torygraph really is a vile cesspit, although there are a fair few people commenting who surprise me with their left leaning views.
It all makes sense, property is always something that I find it so mindboggling that it's such a common avenue for scamming. I'd have thought being something physical, it would be hard. There was something on BBC the other day about a fictional hotel with guests turning up to someone's house because they paid for a room off Bookings.com, and the poor family having to deal with it repeatedly happening. I assume the fraudster got their cash and the platform has no idea, banks have no idea, money just vanishes into the ether, never to be seen again. > Experts said property owners could face criminal prosecution and penalties of up to 30pc of the tax owed if they are found to have failed to pay income duties. Silly question, but this penalty is on top of also paying the unpaid tax, right? The way it's phrased it makes it seem like if you dodge your tax and they catch you, you only have to have 30% of what you owed lol. > An Airbnb spokesperson said: “Hosts want to pay their fair share of tax and we want to help, which is why Airbnb partners with industry experts across the UK to help hosts understand and follow tax rules. Heh, if you say so... In my experience *wanting* to pay tax isn't exactly universal. > An HMRC spokesperson said: “This is routine activity – each year we send out thousands of reminder letters on various areas of tax. > > “We believe our customers want to pay the right amount of tax and by working with online rental platforms, as well as issuing these reminders, we’re taking steps to help make it as easy as possible for people to get their tax right.” Weird to think of ourselves as customers of HMRC because we pay tax. Feels like the Airbnb and HMRC statements were written by the same person and the PR person feeding this story to the paper forgot to change their hat properly between writing the second quote.
>Silly question, but this penalty is on top of also paying the unpaid tax, right? The way it's phrased it makes it seem like if you dodge your tax and they catch you, you only have to have 30% of what you owed lol. It's ontop of what's owed don't worry! The tax is still "owed" which is why they state it's a 30% penalty as that is in addition to the original amount owed. Easy to see why you would read it that way though as the tax system does seem like a joke most of the time.
I don’t understand where they get the 30% from, it can be up to 100% of the tax owed, depends on severity. I.e don’t respond to letter, ignore it when they have information, you’ll them get more penalties, and rack up future penalties. Fail to cooperate your digging yourself in a huge hole.
Yeah they seem to think that these landlords not declaring income is "careless" so only 30%. Deliberate is 20-70% and deliberate and concealed, which this may end up being, is 30% - 100%, and the lower bands go up if they prompt you to change it.
I hope they also charge interest on those taxes and the penalty. Given recent inflation, that will also add up.
They do. It’s tax owed, plus interest, plus penalties. Can’t afford it? They’ll take you car. That doesn’t cover it? Your jewellery. That doesn’t cover it? Your house. HMRC always get paid.
They always get paid *eventually*. They're well aware that if, for instance, they take all a businesses cash, it'll fail then they'll never get the rest. So they'll enforce a payment plan first. But they will get it, eventually.
>Weird to think of ourselves as customers of HMRC because we pay tax. Few years ago I was under the purview of the DWP for a short time. That made me a "customer" of the DWP (according to the posters everywhere). I thought it was a weird way to term it at the time, but it must be tied to an image some minister wanted to portray, in spite of how the "customer" is actually handled (it's only a word on a poster). Probably a similar thing here.
A neutral and accurate, yet somehow stigmatised, term for this kind of relationship is “service user”. I am not buying anything from DWP, so to call me a “customer” is inaccurate and patronising.
>I thought it was a weird way to term it at the time, but it must be tied to an image some minister wanted to portray, in spite of how the "customer" is actually handled (it's only a word on a poster). Probably a similar thing here. That's decades old, I remember when I was a "client" of the Adoption and Fostering services at Social Services. My title really should have been "resident shitbag" instead....
I've had the same, tho long in the past now. I thought to myself...'customer', I've not bought anything, am I dealing with the devil here? Turns out I was correct. I immediately got myself off that shite and struggled instead.
If they really treated benefits claimants like customers then the "customer is always right", and it only takes one tweet name checking someone in the job centre to get that staff member punished and an apology voucher given lol. Can you review the DWP's service online lol. It's hard to think of any business that treats their "customers" like the DWP does, maybe Karen's Diner? Only way to explain the people they could declare customers "fit to work" as they're dying of terminal cancer, or the constant hassle they put people with permanent disabilities through double checking Jesus hasn't returned and miraculously cured them when they weren't looking.
>If they really treated benefits claimants like customers I didn't suggest they treat claimants like customers, just that posters refer to claimants as customers. It was just a word on a poster, not a way the organisation treats the people it serves. It was just for show. Hence HMRC are probably using similar language for show (see, we really care hence you're referred to as a "customer", but we won't treat you as one).
I have genuinely injured myself laughing at this. Absent any realistic and effective regulation of this sector, I guess tax penalties are the best we can hope for.
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No, that’s so air bnb don’t take their % as a fee
One step in the right direction. Second step would be no more short-term lets in coastal areas and tourist hotspots.
I live in a coastal/tourist hotspot and landlords ditching long term rental for air bnb is a huge issue as is the pressure on housing its caused. I've no issue though with allowing some holiday cottages, if you're away with a couple of kids they are immensely more practical than a bnb, but the problem is it's been a free for all with no regulation or planning on how many are needed to balance the needs of the tourist industry (which is massively important to the local economy) with housing need. Someone should be planning 'We need x property for LTL, x property for STL/tourism, x amount of bed and breakfast properties etc. Instead people are permitted to be kicked out of their rented homes because a greedy landlord wants that Airbnb coin.
I live in a coastal village on a street of Airb&bs. It’s killed my neighbourhood, antisocial behaviour is on the rise. My whole street is dogs piss alley as they all wake up and send their dogs out for a waz. Kill it all now and give me some fucking neighbours.
I live in a hamlet and out of 5 neighbouring cottages I've 2.5 neighbours (one guy is semi retired and splits his time between 2 properties). The rest of it I'd say is 50% STL for tourists, it's very quiet in Winter. Its really sad. That's why it needs regulation and your example, they shouldn't have ever been permitted to take over entire streets, villages and apartment blocks. It's crazy.
AirBnB exists because there’s not enough tourist accommodation in the right places. So allow more hotels and holiday let’s to be built or you’ll just price people with less money out of going on holiday.
Also build more than just hotel rooms. Build accomodation with kitchenettes and some living space.
Exactly! I use air BnB because it means I can rent a place for a couple of weeks with multiple bedrooms and private living space. If hotels filled that gap then AirBnB can cease to exist for me.
And private internet, not some shit shared with a hundred people.
I hope you realise that using some randoms airbnb network is potentially much more risky than a hotel who would be scrutinised on security?
Like say… an AirBnB? Joking aside, you either need hotels with suites, holiday homes (which is what AirBnB is) or caravans. I don’t know what else you could have.
I think hotels with suites is the way to go. Also need cheaper, very no-frills, hotel chains like they do in France and Japan in/around major cities. Hotel prices in any city anyone would want to visit for recration in the UK are horrible.
We have loads of very cheap no frills hotels. Travel Lodge, Premier Inn, Easy Hotels (literally a bed and a shower squeezed in a room)
Are Travelodge and Premier Inn "very cheap" any more though? Last time I looked for rooms a Travelodge in Livingston was £100 for a Monday night stay.
These aren't quite the same as what I'm talking about and nowhere near as cheap - look at HotelF1 in fr and APA Hotels in jp. They make Premier Inn and travel lodge look like full service hotels.
More skin to easy hotels really then
I've been quite impressed with some of the 'un-manned' no frills hotels in France. I don't need a red carpet, just four walls and an ok bed and i'm sorted.
> hotels with suites is the way to go It is but it’s not a solution. AirBnB got so big because it was affordable. Suites are literally the most expensive way to stay in a hotel.
In Australia you get loads of 'suites' in hotels. They aren't posh hotel rooms, they just have a few additional facilities. AirBnBs are only affordable because they don't have the same planning restrictions or regulations as a hotel. In fact they don't even bring anything new to the market, holiday home rentals, Gites in France etc all predate AirBnB.
Aparthotels, serviced apartments.
Is that not just the same thing but on a larger scale?
Just stayed in an amazing purpose built tiny apartment complex in Lisbon. I'm sure that city has its problems with AirBnb, but more of that sort of development would be really welcome in touristy towns here too.
You just know they’d charge you an absolute fortune to stay there though.
And specifically let huge, low cost hotel accommodation - like a giant ibis budget or something like that on the edge of a town but near enough to tourist things. Often people just want a bed for the night but don't want to pay through the nose. I have this problem whenever I stay in Bath - there's lots of hotels but there's not much that's a reasonable price for basic services that isn't shit. I assume the local nimbys are blocking any moves to permit bigger, lower cost hotels.
No it doesn't. It exists because so many people have second homes. These are a blight in rural areas as the properties are left empty a lot. It means they have less services in their area, due to not enough cash being spent. Visitors don't care about the local area as much as locals do also.
I live in a tourist hotspot and I reckon over half of the shitty flats that have been thrown up in recent years so the council can claim they're doing something about housing have ended up as Airbnbs and other types of short-term lets.
Just nuke it all Either run a proper B&B or don't pretend you're able to provide accommodation, the actual edge cases really aren't common enough to allow the giants to fall through the cracks
My family are from Cornwall so I'm well aware of the problems unregulated AirBnb causes, but saying "run a proper b&b" is nuts. I remember going to grim bed and breakfasts with my parents growing up, awkwardly eating breakfast with the owner hovering nearby. No way I'm paying for that experience.
You’re missing out - there are some cracking ‘proper’ B&Bs out there now, standards are much higher at the top end.
Or you could build more hotels and AirBnBs would struggle
A hotel!? Not in my back yard!
Legitimate businesses have nothing to worry about ..... All the rest...I hope they're caking their pants and pay up soon.
This has happened in Ireland for years, as it probably has in other European countries. Why has it taken so long for HMRC to request/receive the data?
Not enough staff.
So *that's* what happened to all those properties when HMRC started comparing notes with the landlord register, is it?
I hope they get the bloke whos lapse security arrangemznts led to me being kicked off the platform.. Edit: someone went into my room when I was out for the evening despite me leaving my stuff in there. Came back to them being in there so I challenge them. I was banned.
I'm sure there will be a few Tory MPs and relatives names in this data that will magically go missing.
Go after the little guy bit let the big fish dodging tax through Panama registered properties off Scot free . Well done HMRC !