Short-Term rental website Airbnb has become a go-to staple for travel in recent years. Airbnb acts as somewhat of a middle man between the ‘hosts’ who wish to rent a room or home on a short term basis, and the holidaymaker seeking accommodation. The Airbnb website is one of the easiest travel websites for users of all ages to navigate. The user simply enters the area they wish to stay, and they are given all of the advertisements in this area, complete with pricing, pictures and information about the property. In harder financial times, Airbnb has blossomed as it offers users something different, more transparent, and often cheaper than the usual hotels, without having to pay the host directly.
In recent months however, there has been some concern over tax issues with the website, as Airbnb recently stated that they had been asked by the Revenue Commission to provide information on all transactions for the previous year. This revelation caused confusion among many Irish Airbnb hosts who believed themselves to be exempt from tax under the ‘rent-a-room’ scheme. This scheme ensures that those renting out a room in their home are exempt from paying tax on income they earn by doing so, up to a designated threshold. The small-print on this scheme does however specify that it is not applicable to those renting rooms on a short-term basis, which is of course Airbnb’s main ethos.
Declan Rigney, assistant secretary of the Revenue’s planning division has stated that there will now be a larger focus on digital marketplaces and peer-to-peer trading in terms of tax payments.
“There are a huge number of businesses trading online. We need to make sure during the course of our audits that all income is returned.”
It has been advised that those who feel they may be affected by this information should voluntarily submit the required information ASAP to avoid issues.
The Revenue Commissioners have stated that this confusion over the rent-a-room scheme was clarified by them earlier in the year as they view businesses such as Airbnb as a trade. Airbnb’s website currently states that they expect all hosts to adhere to the tax demands of their respective areas.
We would advise that any Airbnb hosts keep detailed and correct records of all income and expenses gained through their dealings with the website. If you should require any assistance or advice in this matter please contact us at DCA Accountants.