Airbnb hosts and MTD: are you caught, and when?

If you let a place on Airbnb, Vrbo or Booking.com, you may have seen the phrase "Making Tax Digital" and wondered whether it applies to you. It is more straightforward than the jargon suggests, and most hosts do not need to rush out and hire an accountant.

This is who gets caught, when, and what it means for you as a host.

Short-term lets are just property income now

There used to be a special regime for holiday lets, the furnished holiday lettings (FHL) rules. That was abolished from April 2025. Your Airbnb or Vrbo earnings are now treated as ordinary UK property income, the same as a standard buy-to-let.

One point to flag early: you must declare your gross booking income, then claim platform fees as an expense. The payout that lands in your bank is already net of Airbnb's cut, so it understates both your income and your costs. HMRC will have the fuller picture regardless. Under the UK's reporting rules for digital platforms, sites like Airbnb, Vrbo and Booking.com report UK hosts' earnings to HMRC every January.

If you only let a spare room in your own home, Rent-a-Room relief can make up to £7,500 a year tax-free, but that is for a room in the home you live in, not a whole-property let.

The test that decides if you're in

Making Tax Digital for Income Tax is being phased in based on your qualifying income. This is the part people get wrong, so read it slowly.

Qualifying income means your gross rental income plus any self-employment income: turnover, before you deduct a single expense. Not profit. Not what is left after the platform takes its fee. The full amount that comes in.

The phase-in dates are:

• Qualifying income over £50,000, you join from 6 April 2026
• Qualifying income over £30,000, from 6 April 2027
• Qualifying income over £20,000, from 6 April 2028

If you are under £20,000, you are not required to join yet.

Because it is measured on gross income across all your property and self-employment, a single well-booked listing can push you over the line. You can see the full breakdown in our guide to MTD income thresholds.

A worked example: one busy listing is enough

Laura has one coastal cottage on Airbnb and Vrbo. Over the tax year, guests pay her a total of £34,000 in bookings. Airbnb and Vrbo take their fees, so her actual payouts come to around £29,500, and after cleaning, laundry, council tax and repairs, her real profit is closer to £18,000.

Which figure decides whether she is caught by MTD? The £34,000 gross figure. Not the £29,500 in payouts, and not the £18,000 profit.

That puts Laura over £30,000, so she will need to follow MTD for Income Tax from 6 April 2027. If her bookings grew to over £50,000 gross, she would have been in from April 2026 instead.

This catches a lot of hosts out. They think of the money they keep, but HMRC looks at the money that comes in.

What about a jointly-owned holiday let?

Say Laura owns that cottage 50/50 with her partner Nathan. The £34,000 gross is split by ownership share, so £17,000 each. The threshold is measured per person, so on that property alone, neither is over £20,000 and neither is caught yet.

But if Nathan also does some freelance work, that self-employment turnover gets added to his £17,000 share. Between them it could tip him over a threshold while Laura stays under. Everyone is tested on their own total. There is more on this in reporting property income to HMRC and MTD when you have other income.

What MTD actually asks of you

Once you are in, three things replace your old Self Assessment return for this income:

1. Keep digital records of your income and expenses.
2. Send four quarterly updates to HMRC across the tax year.
3. Submit one tax return after the tax year ends.

The standard quarters end on 5 July, 5 October, 5 January and 5 April, with deadlines of 7 August, 7 November, 7 February and 7 May. From 2025-26, the quarterly updates are cumulative: each one is a running year-to-date total, so a small slip in an earlier quarter corrects itself in the next.

The quarterly updates are light-touch, a quick tally rather than a full return. The real reckoning is the tax return, due by 31 January after the tax year ends, the same date Self Assessment always used. That is where you confirm the year's figures and finalise your tax. Our MTD deadlines guide sets the calendar out clearly.

You don't need an accountant to do this

Plenty of hosts with one or two listings manage MTD themselves. The trick is keeping records as you go, rather than facing one dreaded pile every January.

That is what Quarterwise is built for. It imports your Airbnb, Vrbo and Booking.com earnings and commission files so your gross income and platform fees land in the right place, keeps your digital records, and files both your quarterly updates and tax return to HMRC. There is a free plan for one property, with no card and no time limit, useful if you want to test it before your phase-in date.

This article is general information, not tax advice. Please check your own position with HMRC or a qualified accountant.