Airbnb income tax for UK hosts under the new rules

If you let a room or a whole property on Airbnb, you may have wondered whether HMRC really knows about it. The answer is yes, and increasingly so. Under the UK's reporting rules for digital platforms, Airbnb, Vrbo and Booking.com now report UK hosts' income to HMRC every January.

That is not a reason to panic, but it is a good reason to make sure the numbers you declare match the numbers Airbnb sends. Below is what needs to go on your tax records, and where hosts most often trip up.

Payouts aren't your income, gross bookings are

This is the single biggest mistake we see. When money lands in your bank account from Airbnb, that figure is a payout, the amount left after Airbnb has taken its service fee. It is tempting to treat that as your rental income, but it isn't.

HMRC wants you to declare your gross booking income, the full amount the guest paid before any platform fees. You then claim the Airbnb fees separately as an allowable expense.

The end result is often similar, but the two figures are not interchangeable, and getting it wrong understates your income on paper. That matters more now that HMRC can compare what you report against what Airbnb reports.

A worked example

Matthew lets a spare flat on Airbnb. Over a quarter, guests pay him £6,000 in total. Airbnb deducts its service fee of, say, 3% (£180) and pays him £5,820.

The wrong way is to record income as £5,820, the payout. The right way is to record income as £6,000, the gross bookings, then record £180 as a platform-fee expense.

Both approaches leave Matthew taxed on roughly the same profit, but only the second matches the figure Airbnb reports to HMRC. If Matthew declares £5,820 as income and HMRC's copy from Airbnb says £6,000, that mismatch is the kind of thing that prompts a letter.

The furnished holiday lettings regime has gone

If you have hosted for a while, you may remember the furnished holiday lettings (FHL) rules, which gave short-term lets some special treatment. That regime was abolished from April 2025. Short-term let income is now ordinary UK property income, the same category as a standard buy-to-let.

One relief still exists for a specific case. Rent-a-room relief lets you earn up to £7,500 a year tax-free from letting a furnished room in your own home. It does not apply to whole-property lets or a separate flat, only a room in the home you live in. You can read more in our guide on reporting property income to HMRC.

Where Making Tax Digital fits in

Hosting income counts as property income for Making Tax Digital for Income Tax. Whether you are required to join depends on your gross rental and self-employment income, so turnover rather than profit:

• over £50,000, from 6 April 2026
• over £30,000, from 6 April 2027
• over £20,000, from 6 April 2028

Below £20,000 you are not required to join yet. You can see how the phasing works in our MTD income thresholds guide and on the GOV.UK Making Tax Digital for Income Tax pages.

The threshold is measured on gross income. As above, your gross Airbnb bookings, not your payouts, are what count towards it. A host who only tracks payouts might assume they are under a threshold when they aren't.

Once you are in MTD, you keep digital records, send HMRC four quarterly updates a year, and submit one tax return after the tax year ends. The standard quarters end on 5 July, 5 October, 5 January and 5 April, with updates due by 7 August, 7 November, 7 February and 7 May. The tax return is due by 31 January, the same date Self Assessment always used. There is a full rundown in our MTD deadlines guide.

Matching your records to what Airbnb reports

Because HMRC receives Airbnb's figures every January, the most useful thing you can do is keep your own records aligned with the platform's. That means:

1. Record gross bookings as income.
2. Record Airbnb service fees as an expense.
3. Keep your ordinary running costs alongside them: cleaning, laundry, consumables, repairs and a share of utilities.

Airbnb provides an earnings file that breaks reservations and fees down for you. Reconciling that against your records once a quarter removes the guesswork.

If you let jointly, say a property owned with a partner, each owner reports their share of the income, and the MTD threshold is measured per person. So a £40,000 gross let split 50/50 gives each owner £20,000 towards their own threshold.

Making it less of a chore

This is the sort of tidy-up software can handle for you. Quarterwise imports Airbnb earnings files directly, reservations and commission invoices, so your gross income and platform fees land in the right places without manual retyping. It then keeps your digital records and files your quarterly updates and tax return to HMRC. If you have a single property, the free plan covers all of that at no cost.

The aim is that when HMRC opens its January file from Airbnb, your numbers already agree.

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