Airbnb and other short-term letting platforms now report host income directly to HMRC, so if you’ve been treating your listing as “just a bit of extra cash” rather than taxable rental income, it’s worth checking your position carefully. A common question we hear is whether the Let Property Campaign can be used to put things right — and the answer is generally yes, but with some important nuances.
Unsure whether your Airbnb income should have been declared, or how far back you need to go? Book a free 15-minute call with Felix Accountants to talk it through confidentially.
Is Airbnb Income Taxable?
Yes. Income from letting a property, or even a spare room, on a short-term basis is taxable in the same way as any other rental income, subject to any reliefs you’re entitled to. The only exceptions are the £1,000 property allowance (if your gross rental income is below that threshold) and the Rent a Room Scheme, which lets you earn up to £7,500 tax-free from letting a room in your own home, provided you live there too.
Does the Let Property Campaign Cover Short-Term Lets?
The LPC applies to individual landlords with undeclared tax on residential property income, and this generally includes short-term and holiday-style lettings of residential property, whether booked through Airbnb, Booking.com, Vrbo or direct. What matters for eligibility is that the property is held personally, not through a limited company, and that the income is genuinely rental-style rather than a trading business involving substantial additional services such as daily cleaning, meals or reception.
If your short-term letting activity has grown into something closer to running a guest house, with significant services provided, HMRC may view it as a trade rather than a property business, which changes how it’s taxed and may take it outside the scope of the LPC. This is a grey area worth getting professional input on before you disclose.
What Changed With Furnished Holiday Lets?
Until 6 April 2025, properties meeting certain letting and availability conditions could qualify as Furnished Holiday Lets (FHLs), unlocking more generous tax treatment, including fuller mortgage interest relief and access to certain capital allowances. That regime was abolished from the 2025/26 tax year, and short-term let income is now taxed under the same rules as standard rental property income, including the mortgage interest restriction that already applied to other landlords. If you’ve been disclosing historic years, it’s important to apply the rules that were in force for each specific tax year rather than today’s rules retrospectively.
How Far Back Do You Need to Go?
As with any Let Property Campaign disclosure, the number of years you need to cover depends on your behaviour: whether the non-disclosure was a genuine, reasonable mistake, careless, or deliberate. Our guide on how many years of rental income landlords must disclose sets out the general time limits in more detail.
Accidental Hosts and First-Time Disclosures
Many people who let out a property short-term didn’t set out to become landlords in the tax sense — perhaps you started renting a spare property while working away, or began hosting guests after downsizing. If that sounds like you, our page on becoming an accidental landlord covers how HMRC treats these situations and what you need to do to get compliant.
Practical Steps If You Haven’t Declared Airbnb Income
- Pull together booking records, payout statements and platform tax summaries for each relevant tax year
- Work out which years the Furnished Holiday Let rules did or didn’t apply, since this affects your allowable deductions
- Check whether the Rent a Room Scheme or property allowance already covers part of your income
- Consider whether your behaviour is likely to be classed as careless or deliberate, since this affects the penalty rate and the years you must disclose
- Make your disclosure before HMRC contacts you, to secure unprompted disclosure treatment and a lower penalty
Common Mistakes Hosts Make
The most frequent error we see is hosts assuming that because Airbnb “already takes its cut” or issues a summary, the income has somehow already been reported to HMRC on their behalf. It hasn’t — platform reporting to HMRC is a compliance tool for HMRC, not a substitute for your own Self Assessment return. Another common mistake is applying FHL-style deductions to years after the regime ended, which can trigger its own correction later.
How Felix Accountants Can Help
We regularly help hosts and landlords work out exactly what’s owed across multiple tax years, apply the correct rules for each year, and submit an accurate Let Property Campaign disclosure that stands up to HMRC scrutiny.
Frequently Asked Questions
Do I need to declare Airbnb income if I only host occasionally?
If your gross rental income from all sources is under £1,000 in a tax year, the property allowance may mean you don’t need to declare it. Above that, it generally needs to be reported, even if hosting is occasional.
Can I still get Furnished Holiday Let tax treatment for a current listing?
No. The Furnished Holiday Let regime was abolished from 6 April 2025, so short-term let income from the 2025/26 tax year onward is taxed under the standard property income rules.
Does the Let Property Campaign cover overseas short-term lets?
It can, in certain circumstances, though overseas income brings in additional considerations such as double taxation relief. It’s best to get specific advice if your undeclared income relates to a property outside the UK.
What if my short-term letting is really more like running a guest house?
If you provide substantial additional services, HMRC may treat the activity as a trade rather than a property business, which can affect both how it’s taxed and whether the Let Property Campaign is the right disclosure route.