Do I have to pay tax on my Airbnb income in the UK?

Full answer

Airbnb and other short-let income is taxable in the UK. It affects anyone letting a room or property, from occasional hosts to full-time operators. Three reliefs shape your bill. First, the GBP 1,000 property allowance: if your total property income for the year is GBP 1,000 or less, it is tax-free and you need not report it. Second, Rent a Room relief, which can exempt income up to a set annual limit where you let furnished accommodation in your own home -- check the current Rent a Room threshold on gov.uk as it is not in this rate card. You use either the property allowance or Rent a Room, not both on the same income. Above the relevant allowance you pay Income Tax on the profit (income minus allowable expenses) at your marginal rate: 20% basic, 40% higher, or 45% additional. Worked example: you earn GBP 9,000 from an Airbnb annexe and have GBP 2,000 of expenses, giving GBP 7,000 profit. With the GBP 1,000 property allowance deducted instead of expenses, taxable income is GBP 8,000; a higher-rate taxpayer pays GBP 3,200 (40%). You would choose whichever method -- actual expenses or the allowance -- leaves you better off. Report it through Self Assessment if your gross property income exceeds GBP 1,000. Note that if your letting qualifies as a Furnished Holiday Let, the rules changed from April 2025 and most FHL-specific tax advantages have been withdrawn, so short lets are now generally taxed like ordinary property income. 2026/27 detail: the GBP 1,000 property allowance and the Income Tax bands (basic to GBP 50,270 gross, higher to GBP 125,140) are unchanged. Use the self-employed or income tax calculator to estimate the bill on your profit.

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