The UK government just announced that hosts can continue to benefit from £7,500 tax free earnings, as part of its Rent-a-Room relief scheme. The decision represents a huge win for the Airbnb host community across the UK who participated in the consultation.
The public consultation included evidence from over 650 hosts who spoke up by taking surveys, participating in roundtable discussions and even submitting written testimonials directly to HM Treasury to explain how home sharing helps boost their income.
The Rent-a-Room relief scheme allows hosts to earn up to £7,500 tax free from sharing space in their only or main home (the threshold is halved if you share the income with your partner or someone else). The government’s sharing economy tax break allows hosts to earn £1,000 tax free by sharing any part of their homes, including the entire place. This cannot be used in connection with Rent-a-Room Relief.
Whilst the Government has opted to maintain the relief at the current level, they are currently consulting on a policy change to the existing Rent-A-Room relief scheme. The change proposed will be to introduce a ‘shared occupancy test’ which will ensure that home sharers are the only people who can access the relief. This policy change is currently open for consultation which will end on 31 August, 2018 and the final legislation will be included in the 2018-19 Finance Bill.
“This is great news for UK hosts who open their homes and share the best of British hospitality with guests from around the world. We are grateful to the government for listening to the voices of UK hosts and for continuing to support our nation’s self-starters and innovators. The UK continues to be a world leader for the sharing economy and we will continue to be good partners to the government as it rolls out further guidance.”
– Natasha Mytton-Mills, UK Policy Manager
Airbnb hosts spoke positively of the news as well.
Mary, a host in Camden said, “Wonderful news! As a retired person, I use income from Airbnb to enable me to travel worldwide. It also keeps me physically active and mentally stimulated in my old age. I’m glad that the UK government recognised that Rent-a-Room relief helps enable people like me to host.”
Josef, a host in Southwark noted, “It is a step in the right direction that the government has decided to keep the Rent-a-Room relief and in doing so, recognise the positive that comes from platforms like Airbnb. Hosting on Airbnb has had a direct impact. I have been able to use the additional income to kick start my 3D printing business and provided a room for people that would otherwise not be able to afford expensive hotel accommodation in London.”
Rebecca, a superhost in Hackney, echoed this sentiment, stating, “I am thrilled to hear that the Treasury has listened to Airbnb home sharers across the UK who expressed their views and experiences as part of this consultation process, either in person or by submitting written statements. For many of us, inviting strangers into our home is a way of balancing the books and this tax relief can be a genuine lifeline for some – it helps people like me stay in family homes after family break-ups, careers changes or launch new businesses in the face of redundancy. With this decision, the Treasury has shown it is really listening to the people and prioritising them over a page full of numbers.”