Short-term letting on Airbnb has become a significant income stream for many UK property owners. Whether you’re renting a spare room, a separate property, or a holiday let, HMRC wants to know about it — and there are specific tax rules that apply.
Is Airbnb Income Taxable?
Yes. Income from Airbnb and similar short-term letting platforms is taxable. However, there are two helpful reliefs that may apply:
The £1,000 Property Allowance
If your gross rental income is £1,000 or less in a tax year, it’s covered by the property income allowance and you don’t need to declare it. Above that, you must file a self assessment return.
Rent a Room Relief
If you’re renting a furnished room in your own home, you may qualify for Rent a Room relief. This allows you to earn up to £7,500 per year tax-free. If your income exceeds this threshold, you choose between declaring the excess or opting out and claiming actual expenses.
What If You Let a Whole Property?
If you let an entire separate property, Rent a Room relief does not apply. You pay tax on your rental profit — income minus allowable expenses. If the property qualifies as a Furnished Holiday Let (FHL), different and historically more generous rules apply — though the FHL regime is being abolished from April 2025. See our guide to Airbnb furnished holiday let tax UK for full detail.
What Can Airbnb Hosts Claim as Expenses?
Allowable expenses reduce your taxable rental profit. These typically include:
- Cleaning fees between guests
- Consumables provided to guests (toiletries, tea, coffee)
- Laundry and linen costs
- Airbnb platform fees
- Property repairs and maintenance
- Insurance — buildings, contents, and host liability
- Mortgage interest relief subject to restrictions
- Accountancy fees
HMRC’s full guidance on expenses for rental properties is part of the Property Income Manual. For a full breakdown, see our guide to Airbnb host expenses UK.
Mortgage Interest Restriction
Individual landlords can no longer deduct mortgage interest as a direct expense. Instead, you receive a tax credit equal to 20% of your mortgage interest costs. This change affects higher-rate taxpayers significantly. Good tax planning is particularly important if you’re in this position.
Do Airbnb Hosts Need to Register for Self Assessment?
Yes, if your Airbnb income exceeds £1,000 in a tax year. Register at gov.uk/register-for-self-assessment.
Get Specialist Help
Short-term letting tax is more complex than standard buy-to-let. At Simplr Accounting, we help Airbnb hosts across the UK understand their position, claim every allowable expense, and file correctly.
Visit our accountant for Airbnb hosts page or book a free discovery call and we’ll take it from there.