Short-term let tax, made simple

Booking platforms now report your income to HMRC

Under the UK’s reporting rules for digital platforms on GOV.UK, booking platforms collect and verify their UK hosts’ details and report their income to HMRC every January. This isn’t a new tax, but it does mean HMRC sees a platform’s version of your earnings. The practical takeaway: your own records should be gross-accurate and match the platform’s figures rather than your bank payouts.

How much tax you pay on Airbnb and short-term let income

There’s no special tax for Airbnb or other short-term lets. Your profit from short-term lets is added to your other income for the year and taxed at your normal Income Tax rate, so the same profit costs a basic-rate taxpayer less than a higher-rate one.

Small earners may owe nothing. HMRC’s £1,000 property allowance lets you earn up to £1,000 of property income a year tax-free without declaring it. Above that, you can deduct the allowance instead of your actual expenses, which only helps when your real costs are lower than £1,000. You can’t use the allowance alongside the mortgage interest credit.

Does Making Tax Digital apply to you?

MTD for Income Tax is phased in by gross qualifying income: your rental income before expenses, across all your property (short and long lets), plus any self-employment turnover: over £50,000 from April 2026, over £30,000 from April 2027, and over £20,000 from April 2028. A busy short-term let can pass these thresholds well before it feels like a “big” business. Occupancy of a single popular listing can clear £20,000 gross.

Check if and when MTD applies to you →

Why bank payouts understate your income

Platforms pay you net: the booking total minus service fees. HMRC wants the gross booking income declared, with the fees claimed as an expense. Working from bank payouts alone understates both sides. That’s exactly what Quarterwise’s import fixes: it reads your earnings report and records gross income and fees separately, automatically.

Import your platform earnings in minutes

1. Download the earnings or payout report from each platform you host on (CSV or Excel).
2. Hosts on several platforms: import each file. Listings map to the same property, and duplicates are skipped automatically.
3. In Quarterwise, go to Import, upload the file, match your listings to your properties once, and your income and fees are recorded, gross and HMRC-ready. Re-imports skip anything already recorded, so overlapping exports never double-count.

The rules changed in April 2025

The furnished holiday lettings regime was abolished from April 2025, so short-term let income is now ordinary UK property income, with the same expense categories and the same MTD timetable as any other rental. And if you host in your own home, rent-a-room relief (up to £7,500 a year tax-free) may apply instead of expense-based accounting. Quarterwise flags this when you mark a listing as a room in your home.

Selling a former furnished holiday let? In most cases it no longer qualifies for the capital gains reliefs that came with the old regime, such as Business Asset Disposal Relief.

Expenses you can claim as a host

The legal way to pay less tax is to claim every cost of running the let. Common ones include platform service fees and commission, cleaning and laundry, utilities and broadband for the property, insurance, repairs and maintenance, guest supplies, and accounting or software costs. Replacing furniture and appliances can be claimed through replacement of domestic items relief, though not the cost of furnishing the property in the first place. Mortgage interest works differently: you get a basic-rate tax credit rather than deducting it from your income. Costs that also cover your own use must be split, and only the letting share claimed.

Written by the Quarterwise team. Figures sourced from GOV.UK and current at October 2026. This is general information rather than tax advice. For advice on your specific circumstances, speak to a qualified adviser or HMRC.