ANY Glaswegians dreaming of making thousands of pounds from renting out their homes to COP 26 visitors this November should be aware that HMRC (Her Majesty’s Revenue and Customs) will likely be on their case, a leading Glasgow-based tax expert has warned.
“Anyone taking advantage of the conference by letting out domestic accommodation during this period should be aware that the rental income received may be subject to income tax and that the rental activity may need to be notified to HMRC”, said Ian McMonagle, a tax director at city-based chartered accountants and business advisers, Russell & Russell.
“There has been a lot of publicity recently about the high rates of accommodation rental charges that will be paid to landlords during the COP26 conference.
“But potential landlords need to be aware that HMRC recently came to an agreement with AirBnB for the company to supply it with full details of all landlords that had used the AirBnB website to secure “guests”, said Ian.
“So details of any letting income and related expenses may need to be reported to HMRC in Self-Assessment tax returns and any profits made may be subject to income tax.”
HMRC could obtain details of landlords and check that list against those who have notified it about their letting income.
Said Ian, “There are certain reliefs and allowances available to landlords that may mean that there is no requirement to notify HMRC or the level of profits may be below taxable limits.
“But the important thing is not to overlook the tax implications of the letting activity and seek professional advice. Don’t assume that there is no tax to pay, that you don’t need to notify HMRC or that HMRC will not be aware of the rental activity.
“If you fail to notify HMRC of the income, it could lead to penalties of up to 100 per cent of any tax that would be payable and otherwise not reported to HMRC.”
