Homeowners planning to make some extra cash from renting their properties to sports and festival fans this summer need to be on guard for the tax man.
If potential renters can see an online advert on web sites like AirBnB, so can HM Revenue and Customs, warns London tax accountant Stefanie Stapleton of Blick Rothenberg.
With a sporting summer in full stride as Wimbledon serves up two weeks of top tennis, that any income is fair game for the tax man – from serving up strawberries and cream on the front lawn, renting out a parking space, allowing souvenir sellers to pitch in the garden or moving out for the duration of the tournament to rent the whole house.
Summer of fun
“A summer of sports awaits the UK this year and sporting events often provide opportunities for enterprising individuals to make extra money – but even if the British weather plays ball, taxpayers should also be careful that the taxman doesn’t rain on their parade,” she said.
“Residents of Wimbledon, St John’s Wood, Henley and Goodwood often find their properties in high demand during the summer months, as tennis, cricket, rowing, motoring and horse racing fans descend. The rise of websites such as Airbnb demonstrates the popularity of short term lets and taxpayers should bear in mind that if potential customers can see their advertisements online, so can HMRC.”
The warning does not only take in sports events as summer is music and arts festival season across the country as well.
Big festivals like Glastonbury sell out hotels and guest houses months in advance as an army of helpers descends to prepare sites for revellers.
Glastonbury reportedly had 68,000 back-stage workers, ranging from roadies to tanker drivers emptying toilets.
Meanwhile, in Wimbledon, a one-bedroom flat rents for £1,120 a week and four-bed house can make close to £15,000 for the fortnight.
Stapleton explained that several points need considering for tax:
- Any income received from letting property or land is taxed as rental income
- Everyone has a personal allowance of £11,500 to set off against taxable income.
- For those renting out a room in their home to a lodger, the first £7,500 rent is exempt under Rent a Room relief and does not need declaring on a tax return