John M Shanahan & Co.

linking practice to business

Chartered Accountants
Registered Auditors

Phone: 057 93 22100

email: info@shanahan.ie

Attention AirBnB Hosts, Revenue have you in their sights.

August 25, 2015

As you have been warned by Revenue AirBnB have passed on your details to Revenue causing both confusion and panic to those who have availed of their services over the past  15 months.

Armed with this information Revenue can now pinpoint those who have not returned the income generated through their website listings, John Shanahan of John M Shanahan Accountants, Tullamore, Co Offaly  outlines the best course of action and the timetable to implement it..

 

Until early this year, many who registered with Airbnb did so believing the Government’s rent-a-room scheme allowing people to earn up to €12,000 tax-free a year applied to them.
Then Revenue clarified the situation and made it clear short-term lets to guests, “including where such accommodation is provided through online accommodation booking sites”, did not fall within the terms of tax relief.

They have further warned users that they could go back through several years of undeclared income and indicated that there were significant advantages to taxpayers regularizing their affairs.
For many people the income from the occasional renting of spare rooms could now be taxed at their marginal rate of 52% for 2014. (Income Tax [41%], PRSI[4%] & USC[7%])

The Revenue’s case was based on a view that the hosts were involved in a “trade” similar to the owner of a bed-and-breakfast or a guesthouse and thus did not qualify for the relief.
Taking the trade scenario into consideration that means only the trading profit, and not the gross income, will be subject to tax, which makes it less daunting.

In addition, the other minor comfort is that we are talking here about current, as opposed to historic, income.

Therefore an AirBnB host must only pay tax on the profit they earn, after deduction of all relevant expenses They have plenty of time to regularise their tax situation.


It must be remembered that those who do qualify for the rent-a-room relief, must include details of earnings from such rentals on their tax returns.


The Revenue has “gently reminded” more than 4,500 Irish people who rent out properties or bedrooms through the Airbnb website that now would be as good a time as any to ensure their tax affairs are in order.
The information given by AirBnB to Revenue relates to the period from May to December 2014.
This income is taxable in 2014 and the deadline for filing 2014 Form 11 & Form 12 tax returns is not until 31 October next, or 12 November if filed on ROS.

Our advise is – if in doubt take the appropriate action between now and end October 2015 - do not leave yourself exposed.

For further innformation visit Revenue - then call us!

Contact John M Shanahan Accountants for expert advice on
Taxation, Business Management, and Financial matters.

Phone 057 93 22100 or email info@shanahan.ie or use our contact form here- Contact Form.

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