How To Take Airbnb Tax Deductions As A Host

In recent years, Airbnb has taken the hospitality sector by storm. As one of the largest hoteliers in the world, Airbnb allows property owners to host their home as a means of generating income.

Due to its sudden emergence, there has been some misinformation regarding what Airbnb hosts need to do with regard tax. Specifically, whether or not there are certain expenses a host can offset against their Airbnb income.

To help bring some clarity, we’ve provided the ultimate guide to tax deductions as an Airbnb host.

Do I need to report Airbnb income?

Should your short-term rentals or Airbnb home earn you income in excess of the £1,000 per tax year trading allowance, then yes.

Do I automatically receive an Airbnb tax form?

There’s no specific Airbnb tax form. Individuals in receipt of Airbnb rental income

Your Self Assessment tax return is used to declare all income received during the tax year. Income from Airbnb is treated as rental income, as such you will to complete the supplementary page SA105 Income from Property.

If you are not already required to complete a Self Assessment tax return then you can register here. Please note that you must register no later than the 5 October after the end of the tax year in which you received your first income. For the year ended 5 April 2019 you should have registered by 5 October 2019 with you first tax return being due no later than 31 January 2020.

When you submit your Self Assessment tax return on (or prior to) 31st October, HMRC will calculate the tax owed and issue your Self Assessment tax bill. If you submit after 31 October you must do so online. However, HMRC will not guarantee sending you a bill before payment is due so you must use software to make the submission and calculation.

How much tax do I need to pay on Airbnb income?

This very much depends on what other income you have and then the ‘profit’ made from your Airbnb income.

It also depends on whether you’re renting out a full property or a room of your own home. If the latter is true, then you may qualify for the rent-a-room allowance of up to £7,500 per year (splt if home is jointly owned) – provided you also live in the property part of the time.

However, if you’re renting a holiday home or separate property of any kind you’ll be taxed in the same way as a business owner. The rate of tax you pay (20%, 40% or 45%) then depends on your other income.

Do Airbnb properties have deductible expenses?

Yes, you are renting out a single room or rooms in your main residence then you may qualify for the rent-a-room scheme. This means that the first £7,500 of income is tax-free. Only paying tax on income higher than this. A great scheme that means you only have to keep records of income.

If you do not qualify for rent-a-room or you rent a separate propery then the normal rules on expenditure apply. Details of this can be found here.

How do you file for Airbnb taxes?

As mentioned above, you’ll need to collect all of your Airbnb documentation to build a fuller picture of your income and expenses. This information is added to our tax return to calculate any tax due.

Secondly, register for Self Assessment so that you’re able to declare your earnings before the 31st January online deadline.

Finally, remember to also include on your tax return details of all other income you received, even if you have already paid tax on this and HMRC have the details.

How we can help

If you’re still wondering how best to report Airbnb income, turn to GoSimpleTax. Our software works wonders when it comes to logging relevant income and expenditure. It may even highlight ways you may be able to reduce your liability.

Once earnings and outgoings have been logged, you can simply file your Self Assessment tax return directly to HMRC through GoSimpleTax.

Our team work tirelessly to make Airbnb letting straightforward without punishing the hosts. As you enhance your earnings, you’ll recognise the importance of paying exactly what you owe – otherwise you run the risk of falling foul of HMRC’s rules and facing their penalties.

So, sign up for the trial of GoSimpleTax software today and enjoy Airbnb hosting as it was intended.

Or if you are looking for further tax guidance as an Airbnb host, click here.

Last updated: 14th January 2020.

How Far Back Does A Tax Investigation Go?

How Far Back Does a Tax Investigation Go?

Often, the taxman can seem like a shadowy figure, rarely seen or heard until he suspects something isn’t quite right.

If someone is thought to be evading payments – either accidentally or purposely – a tax investigation will be launched to reclaim owed money, and culprits will be subject to HMRC tax investigation penalties for failing to follow the rules.

But why would HMRC visit me? And how far back does a tax investigation go? Here, we answer some of the key questions surrounding a visit from the taxman.

How long does a tax investigation take?

Depending on the complications and the severity of your case, a tax investigation with HMRC can last several months after receiving that first letter. The size of the business also plays a big part, too. Large businesses that are turning over higher amounts usually take much longer to resolve compared to a one-person limited company, for example.

The average time to get to a resolution for one aspect of a taxation in a small case is usually between 3 – 6 months. However, for a full-blown tax investigation, resolution times can extend to as long as 18 months.

Why would HMRC visit me?

Anybody who earns in the UK is required to pay tax. If you’re an employee, your employer will take care of all your payments for you – removing what you owe HMRC from your wages and sending it straight to the taxman (a process known as PAYE).

However, if you earn money outside of regular employment – perhaps you work for yourself, operate your own company, rent out property or make a profit from selling assets – you will need to file a Self Assessment.

The online Self Assessment tax return deadline is 31st January, and your form must be an accurate reflection of your earnings across the previous tax year. For example, earnings between 6th April 2018 and 5th April 2019 must be declared by January 31st 2020. If HMRC believe there are errors or discrepancies, they may launch an investigation into your tax return.

What’s involved in a tax investigation and how far can HMRC go back for tax?

At the start of any tax investigation, HMRC will send a letter informing you that they are looking into your tax submissions. They may do this because they’ve spotted a clerical error, eyed up some inconsistent figures, or received a tip-off from an anonymous source that you may be underpaying.

You’ll be asked to produce several documents during the investigation, including bank statements, invoices, expense receipts and quotes from third parties, all of which can help HMRC determine whether you’ve committed an offence.

So can HMRC investigate closed companies? When it comes to historic cases, HMRC also have the power to reopen previously settled tax returns if an investigation unearths puzzling results. In normal cases, the HMRC tax investigation time limit is 4 years, in which they can go back to claim money from taxpayers.

If someone has been visibly careless (submitting tax returns with mistakes), HMRC can journey back 6 years. For (alleged) deliberate tax avoidance, they can delve into 20 years’ worth of tax returns to find what they’re looking for, so if you’re thinking of closing a limited company and starting a new one, it may be best to reconsider your options.

Use GoSimpleTax software for impeccable Self Assessment returns

Tax investigations are stressful and costly, often resulting in hefty financial penalties and even convictions in worst-case scenarios.

That’s why it’s so important to be 100% accurate on your Self Assessment tax return and keep the taxman happy. If you make accurate tax return submissions, on time every year, you’re unlikely to be subject to any type of scrutiny.

GoSimpleTax software is designed to help you create HMRC-friendly tax returns that are sent to the right place at the right time. Sample our free trial today and get your forms fired off before the Self Assessment tax return deadline on 31st January 2020.

Last updated on 5th November 2019.

Need help preparing your tax return?

By downloading GoSimpleTax for iOS or Android, you can save yourself hours of valuable time and prevent the stress of completing your annual tax return.

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How GoSimpleTax Works

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Simply register for free with your full name and email address.

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Select the income you receive and follow the hints and tips for potential tax savings.

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Validate your personal information when you’re happy with the figures and submit directly to HMRC to get confirmation of your submission in just a few seconds.

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Who Is GoSimpleTax for?

Sole Traders

With GoSimpleTax by your side, your tax duties as a sole trader are made easier than ever before.


Manage your HMRC tax return on assets and investments easily with GoSimpleTax.

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Our software makes the user journey for Uber and taxi drivers simple.

Ministers of Religion

Claim all tax exemptions available to Ministers of Religion and avoid being penalised for the avoidable.

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Self-employed workers can spend more time generating income and less worrying about their tax return.


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What is the income tax personal allowance for 2020?


Much to the disappointment of HMRC, every tax year most UK taxpayers are entitled to a UK personal allowance on their taxable income. To put it simply, most people can receive a certain amount of money before having to pay any income tax. This is what is known as a personal tax allowance.

If you’re struggling to get your head around personal tax allowances, GoSimpleTax is here to explain everything you need to know, simply and easily.


The standard personal tax allowance amount is £12,500 for 2019/2020. Any income you earn after that will be taxable. The amount of tax you pay after your personal allowance is dependent on how much you earn during a tax year. For example, If your income is above £100,000, basic personal allowance is reduced by £1 for each £2 you earn over the £100,000 limit, irrespective of age.

Personal Allowance & Tax Thresholds

Personal Tax Allowance2018/20192019/2020
Tax-free personal allowance£11,850£12,500
Basic Tax Rate (20%)£1-£34,500 (after allowance)£1-£37,500 (after allowance)
Higher Tax Rate (40%)Income over £34,500Income over £37,500
Additional Tax Rate (45%)Income over £150,000Income over £150,000

If your tax affairs are a little more complex, for example, if you’re married or in a civil partnership and receive a marriage allowance, or for age-related or income-related reasons, then your personal allowance works a little differently. You could also receive tax-free allowances for:

  • your first £1,000 of income from self-employment
  • your first £1,000 of income from property you rent


Getting your personal allowance is simple. If you file a self-assessment tax return, you will automatically receive your tax-free personal allowance.

Is there an easier way to file?

If you need to file a tax return, GoSimpleTax is here to make things unbelievably simple. Forget about long-winded form-filling and unwelcome phone calls with HMRC. Simply enter the details of your income and expenses and we’ll create your tax return for you and submit it online directly to HMRC. 

Access GoSimpleTax and discover a new free way of filing your return (HMRC approved), know what expenses will help you lower your tax bill and keep all your records online, safe & sound. Ready to file with one click. Start your free trial today!

Do I need an accountant to do my tax return?

When you realise you have to submit a tax return, you’ll have a lot of questions. ‘When is it due?’ and ‘What do I include?’ will probably be on your list. The one at the very top of it will likely be, ‘Do I need an accountant for a watertight tax return?’.

Some people undertake the DIY method, but doing your taxes for the first time can be scary. Here, we take a look at the benefits and drawbacks of outsourcing this task to an accountant. With the advent of mobile tax software, you may want to avoid them altogether…


An accountant does many tasks for the taxpayer, and the tax return is one of the biggest – they will file it for you on an annual basis. Other duties include:

  • Keeping on top of your books
  • Claiming expenses
  • Calculating the tax owed
  • Finding savings to reduce your tax liability


As with any service, a low cost is unlikely to get you great value for money. How much you should pay for a tax return accountant will depend on the amount of work they do for you, but you can easily pay up to £500 for the service described above.

You might find that some quotes are fixed and offer you more services than you require. Additionally, the cost may differ according to the type of tax return you need, and there are specific requirements related to your circumstances too – a general self-employed tax return will be different to that of a sole trader who also has a job or rental income, for example.


No – GoSimpleTax allows you to easily stay on top of your taxes without the use of an accountant. Our no-jargon tax return software helps you understand and learn how to do your own Self Assessment tax return in minutes, just like an expert.

GoSimpleTax keeps things super simple and enables you to discover tax savings you didn’t even know existed. Just ask Liam, one of our users – he was able to reduce his tax liability by claiming for homeworking costs.

Whether you have a good grasp on your tax savings or you’re clueless when it comes to tax, GoSimpleTax will make sense of everything for you. It means you’ll potentially save hundreds of pounds in accounting fees, whilst still fulfilling your tax obligations and maximising your take-home pay. 


Tax return software is about three things: accuracy, convenience, and zero confusion.

Our Self Assessment software gives you full visibility over your finances. You can see everything in real time and from any device, including your tax liability. It also provides you with tax-saving suggestions by revealing deductible items that will automatically save you money.

‘Do I need an accountant to do my tax return?’ Not with Self Assessment software. GoSimpleTax allows anyone to be a tax expert. Find out for yourself by signing up for our free trial. You can use it to start calculating your tax bill straight away – no credit card required.

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