Airbnb Tax UK: Do You Need to Pay Tax on Your Airbnb Income?

Airbnb income can be taxable in the UK, and it’s important to calculate and report it correctly.

Since January 2024, Airbnb and other online platforms have had to deliver information about hosts and their earnings to HMRC. It’s still on you to declare the income, and you need to do it before HMRC gets in touch.

Whether you need to pay Airbnb tax in the UK, and how much, depends on how you host, what allowances apply to you, and how much you make.

Here’s everything you need to know.

Key points

• There are tax-free allowances available to Airbnb hosts 💷
  The allowance you can use depends on how you host. The Property Allowance can cover up to £1,000 of gross property income, while Rent a Room can cover up to £7,500 if you’re letting a room in your main home.
• Airbnb hosts can claim some expenses 🧾
  If you don’t use an allowance, you can deduct allowable costs such as cleaning, utilities, insurance, repairs, and platform fees. Keep records and claim only the portion related to your letting activity.
• Airbnb hosts have deadlines and filing responsibilities 📅
  You may need to register for Self Assessment by 5 October and file your return by 31 January. Higher-income hosts may also be subject to Making Tax Digital for Income Tax.
• ANNA can simplify your Airbnb tax admin 📱
  ANNA can help organise your income and expenses, track receipts, estimate your tax, manage Self Assessment, and keep you on top of deadlines, so you spend less time sorting your finances.

Is there an Airbnb tax in the UK?

There’s no separate ’Airbnb tax’ in the UK.

Income from hosting on Airbnb falls under the same Income Tax rules as any other rental income, and HMRC treats it that way regardless of whether you’re letting a spare room for a few weekends a year or running a full-time holiday let.

How your income gets taxed depends on how much you earn and whether you live in the property you’re letting. These two factors also determine which tax-free allowances or reliefs you may be able to use.

Which Airbnb tax allowances can you use?

The two main options for Airbnb allowances are the £1,000 Property Allowance and the Rent a Room Scheme.

The £1,000 Property Allowance

The £1,000 Property Allowance can cover income from Airbnb and other types of property letting.

If your total gross property income is £1,000 or less in a tax year, you won’t have any tax to pay on it, and won’t need to tell HMRC about the income.

If your property income goes over £1,000, you can usually choose between two ways of working out your taxable profit:

• Use the £1,000 Property Allowance: Deduct the £1,000 allowance from your gross property income and pay tax on the amount left
• Deduct your actual expenses: Skip the allowance and deduct your allowable property expenses instead

You can choose whichever method leaves you with less tax to pay for the year.

The Rent a Room Scheme

If you live in the property and rent out a spare room, the Rent a Room Scheme may give you a much higher tax-free allowance. You can earn up to £7,500 a year tax-free, whether you’re taking in a long-term lodger or hosting short stays through Airbnb.

The relief works automatically if your gross income stays under £7,500. You don’t need to register for anything or tell HMRC. If you jointly own the property with someone else, such as a partner, the threshold is £3,750 for each owner.

If your gross income from Airbnb goes over £7,500, you’ll need to file a Self Assessment return.

Same as with the Property Allowance, you’ll have two options when it comes to your taxable profit:

• Use the Rent a Room Scheme: Apply the £7,500 tax-free allowance to your gross rental income and pay tax on anything above it
• Opt out and deduct your actual expenses: Give up the Rent a Room allowance and deduct your allowable expenses instead

The scheme also covers more than just the room rate. Extras you charge guests, such as breakfast, towels, or cleaning fees, count towards your £7,500 gross income. So make sure you include everything guests pay you when checking whether you stay within the threshold.

💡 Did you know?

ANNA’s Auto Accountant lets you tag Airbnb payouts as they land, so you can see at a glance whether you’re tracking towards the £7,500 or £1,000 threshold without digging through bank statements at the end of the year.

What changed for Airbnb hosts in April 2025?

The tax treatment of furnished holiday lets changed in April 2025, when the Furnished Holiday Lettings (FHL) tax regime was abolished.

Before the change, qualifying holiday lets could benefit from additional tax advantages, including more generous expense deductions and access to certain Capital Gains Tax reliefs.

Today, however, furnished holiday lets are taxed under the same property income rules as other rental properties, with mortgage interest relief restricted to the basic rate.

Can Airbnb income be treated as trading income?

If you’re running your Airbnb as a business, with services such as regular cleaning, changeovers, and guest management, HMRC may treat what you earn as trade income rather than property income.

That changes which expenses you can claim and whether National Insurance applies. Get an accountant’s opinion if you believe your hosting has grown beyond a passive let.

Could Airbnb affect Council Tax or business rates?

Your Airbnb activity can also affect whether you pay Council Tax or business rates on the property.

Did you know?

In England, if your property is available to let for 140 days or more a year, and let for at least 70 of those days, it’s assessed for business rates rather than Council Tax.

Wales and Scotland run their own versions of this rule, with different day thresholds and, in Scotland’s case, a separate short-term let licensing scheme.

If you get this wrong, you could end up paying the wrong charge or miss out on Small Business Rates Relief if your property would otherwise qualify.

Allowable expenses you can claim

If you’ve gone over your allowance and you’re calculating tax on actual profit rather than using the Property Allowance or Rent a Room’s flat allowance, you can deduct costs that relate directly to your letting activity.

These costs typically include:

• Cleaning and laundry costs between guest stays
• Utility bills for the portion of the property being let
• Council Tax or business rates, depending on how the property is classed
• Insurance covering the letting activity
• Repairs and maintenance, though not improvements
• Letting agent or platform fees, including Airbnb’s service charge

Keep receipts and records for everything. If HMRC ever asks to see supporting evidence for your return, you’ll need to show what you claimed and why.

What if you only let part of your home?

You can’t automatically claim the full cost of a bill if you also use the property personally.

If you only rent out part of your home, or you live in the property yourself for part of the year, you’ll need to split your expenses between personal and letting use.

For example, you might split a cost based on the number of rooms used for letting or the number of days the property was available to guests.

Always keep a record of how you calculated the split, so you can explain your figures if HMRC asks.

When do you need to register and file?

If you need to declare your property income to HMRC, you may need to register for Self Assessment by 5 October following the end of the tax year in which you first had to report the income.

Once registered, you’ll need to file your tax return and pay any tax due by 31 January following the end of the tax year. You may also have to make payments on account, which are advance payments towards your next year’s tax bill.

Here’s a breakdown of the deadlines:

Making Tax Digital for Income Tax

If your Airbnb income is high enough, you may also need to follow Making Tax Digital for Income Tax (MTD for ITSA) rules.

From April 2026, MTD applies to landlords and self employed people with qualifying income over £50,000 a year.

The MTD threshold drops to £30,000 from April 2027 and £20,000 from April 2028, bringing more landlords and self employed people into the system.

If you’re affected, you’ll need to keep digital records and send quarterly updates to HMRC, rather than waiting until the end of the tax year to report everything on one Self Assessment return.

Even if your Airbnb income doesn’t bring you into MTD yet, it’s worth keeping an eye on your total qualifying income as the thresholds fall.

How ANNA helps with your Airbnb tax admin

Keeping track of Airbnb income, expenses, and tax deadlines can get messy, especially when you’re juggling bookings with your other business or personal finances.

ANNA brings your bookkeeping and tax admin together, so you can keep a clear record of what you earn and spend throughout the year. It offers:

• Automatic bookkeeping: Keep your Airbnb income and expenses organised as transactions come in
• Receipt capture: Store receipts digitally and be prepared to back up every expense you claim
• Dedicated UK business account: Keep your business income and expenses separate from your personal finances
• Expense categorisation: Automatically organise your spending into the right categories
• Real-time tax estimates: See an estimate of your tax bill as your income changes
• Smart Pots: Set money aside for upcoming tax payments, so your tax bill doesn’t come as a surprise
• Free Self Assessment filing: Get support with preparing and filing your Self Assessment tax return for free in your first year
• Seamless invoicing: Create and track invoices and keep your income records in one place
• Smart reminders: Get reminders for important tax and filing deadlines
• 24/7 UK-based support: Access help when you need it, without waiting for office hours

Sign up with ANNA today, and spend less time untangling your Airbnb taxes.