The differences
Short-term lets, holiday Lets, Airbnbs and serviced accommodation. These are all forms of property rentals that have as many similarities as they do differences – but what are the differences, exactly? Let’s break them down.
Short-term let
A short-term let is a property that’s rented for a brief duration, usually less than six months. While it can be chosen for holiday purposes, it equally applies to people who need somewhere to stay for a short period of time, as a way to become established in a new area, for example.
A short-term let is a broad term that can apply to a holiday rental, Airbnb accommodation or a serviced apartment. Although all Airbnbs are a type of short-term let, not all short-term lets are listed on the Airbnb platform.
Holiday let
As the name suggests, a holiday let is a property that’s rented to people who want somewhere to stay during their vacation. These are typically let on a short-term basis and, in some instances, can be defined as serviced accommodation.
Where the differences from Airbnb come in is how the let is used. This is important to understand for tax purposes. A holiday let must only be used for vacations. An Airbnb, however, can accommodate both leisure and business travellers.
Airbnb
Airbnb is a short-term letting option that enables guests to rent an entire property or a private room on from a designated host. Guests can use the platform to find accommodation for business or leisure travel, and the type of space that is rented out will impact the tax liabilities of hosts.
Serviced accommodation
Another form of short-term rental, serviced accommodation enables a guest to rent an apartment, house or hotel-like space while enjoying amenities such as Wi-Fi, kitchen, bathroom, etc. While similar in many ways to Airbnbs, serviced accommodation tends to follow a standardised, hotel-like rental experience whereas Airbnbs vary widely in terms of presentation and services.
How does each differ from a tax perspective?
As you can see, there are variances resemblances between the types of shirt-term let listed, but regardless of your rental proposition, it’s important that you understand your tax obligations. Holiday lets can benefit from the £1,000 tax-free allowance, for example, while Airbnb hosts renting a room in their house may qualify for the Rent a Room scheme, which offers a tax-free allowance of £7,500.
With Airbnb now sharing data with HMRC, it’s critical that hosts know the rules around taxation and comply with them. At Ibiss & Co, our expert accountants can help ensure that you minimise your tax liabilities while maximising your profits. We offer tailored property tax advice to those offering any kind of short-term let, whether it’s an Airbnb, holiday let or serviced accommodation.
Contact our team to find out more about Airbnb UK regulations or to discuss how the Airbnb/HMRC relationship may affect you. We have offices in Barking, Tooting and Walsall.
