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Airbnb Tax Guide

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Everything you need to know to about tax when you work as an Airbnb landlord.

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Airbnb is a platform for letting or renting a spare room, flat, or house on a short-term basis.

Joe Gebbia and Brian Chesky founded Airbnb in 2008. After charging three guests $80 per head to use their airbeds when every hotel in San Francisco was booked, they realized the financial potential that renting spare rooms has.

Since then, Airbnb served over half a billion customers and offers around 6 million places to stay in over 81,000 cities. Today, there’s a large number of hosts letting properties that range from a bedroom with a shared bathroom to a stand-alone house.

In the UK, 76% of Airbnb hosts use the platform as a side hustle to earn some spare cash. But there are a few things to consider when setting up, and that’s why we created this guide.

How to become an Airbnb landlord?

There’re a few things you need to consider when listing your property on Airbnb.

Here you can find our top tips for you:

  • Assess your space – Think about how many people you can accommodate and the ideal guest.‍
  • Have clear expectations – Think about things like your minimum stay or seasonality.
  • Check your short-term renting laws - check your tenancy agreement first as there’s usually a clause on this or ask your landlord for permission to sublet part or the whole property.

Note that within London you can also short-term let part or all of your property for 90 days of the year without a permit. After that, you need to submit an Airbnb exemption form and receive a planning permit to change the property type. Other areas with specific requirements are: Glasgow, where you might need a specific permit to let your house as an Airbnb. Northern Ireland, where you'll need a permit from Tourism NI, the institution responsible for the tourism in the country. And Isle of Man, Guernsey and Jersey, where you'll need a certificate similar to the Northen Ireland one. Generally, we advise you to contact your local City Council before starting an Airbnb to check if you need any type of specific permit.

  • Make a list of all the supplies you’re going to need
  • Conduct market research on pricing – get a sense of pricing by looking at similar properties in your area. Moreover, you can use a platform called Dynamic Pricing, which changes your prices depending on the time of the year.
  • Take lean, bright, and high-quality photos
  • Use the super host network – being a Superhost can get you more business as it’s seen by guests as an indication of quality.
  • Establish the rules that you want
  • Use the instant book option - but with the setting that guests can only instant book with a high rating of their own.
  • Ask for reviews

Read our complete post about how to become an Airbnb landlord here.

How much can I make as an Airbnb landlord?

According to All the Rooms, a short-term let app, the average UK Airbnb host makes around £17,400.

Note that there’re a few costs to consider when deciding your prices and trying to make a profit:

  • Optional fees, like cleaning fees, on-street parking, and meals, which are added to the total cost paid by the guest. ‍
  • Service fees from Airbnb (usually 3% for hosts and 14% for guests). Service fees change the price for the guest, therefore you should factor it into how much you charge. Also, consider that they won’t get this back if you cancel and refund them. ‍

Do I need to pay tax? And how do I pay tax?

This all depends on how much money you make with Airbnb (and outside Airbnb).

If you earned less than £1,000 a year with Airbnb you do not need to do anything. HMRC lets you earn £1,000 a year through websites like Airbnb without worrying about income tax.

If you earned more than £1,000 a year with Airbnb, you need to submit a tax return. This doesn't necessarily mean you need to pay tax. It just means HMRC wants to know a little bit more about your business in case you start earning more in the future.

Generally, Airbnb rentals are not considered separate from the rest of your income, meaning that if you let out an Airbnb, you’ll have the income taxed on top of the rest of your income as one total.

In the UK your income is taxed based on how much you’ve earned in a year. Specifically:

  • Tax allowance: 0% of earnings (You’ve earned between £0 and £12,570)
  • Basic rate: 20% of earnings (You’ve earned between £12,571 and £50,270)
  • Higher rate: 40% of earnings (You’ve earned between £50,271 and £150,000)
  • Additional rate: 45% of earnings over £150,000

Bear in mind that if you earn over £85,000 per year from your Airbnb, you’ll need to pay VAT at 20%. You can actually charge this to the customer although it could impact demand.‍


The Government Rent a Room Scheme dictates that you don’t pay tax on the first £7,500 you make from renting out a room or your entire property for a short-stay period, but only if the property is your main residence. This is automatically applied if you earn below the threshold so you don’t need to do anything, and it applies also if you’re renting.

Moreover, you can also deduct expenses faced for renting your property.

Sometimes if you deduct expenses, you can have a greater reduction than using the Government Rent a Room Scheme.

On the other hand, if you're renting another property, so not your main residence, you'll be taxed normally as shown above. You should also know that if you let the property for more than 140 days, you will need to pay the business rate, which means a council tax increase.

Each year you need to fill out a self-assessment tax return. What you pay is your tax bill minus the expenses of running your Airbnb. You can read more on how to complete your self-assessment tax return in this Earnr article.

The usual cut-off date to complete your self-assessment is the 31st of January if you’re doing it online, and the 31st of October if you’re completing the form by post.

What can I expense as an Airbnb landlord?

As an Airbnb host, you’ll have various running costs depending on the work you do. You can deduct these costs from your taxable profit as long as they’re eligible expenses.

So if you earn £50,000 and you claim £9,000 in expenses, you’d only be taxed on £41,000 for the year.

You can read more on what the Government considers expenses here.

As a host you might expense things like:

  • Cleaning services
  • Council tax
  • Utility bills
  • Kitchen and bathroom supplies
  • Rent or mortgage
  • Insurance

How can Earnr help?

Earnr makes self-employed bookkeeping easy, so that you can spend less time worrying about this kind of stuff and more time growing your business.

You can separate your business transactions from your personal ones, track your expenses and get a real-time tax estimate so you know whether or not you need to submit a tax return.

Check it out here.

Other Airbnb articles

Looking for more? Why not check out some of the other articles we've written to help you with your Airbnb business.

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