Who This Guide Is For
This page covers UK hosts letting whole properties or spare rooms through Airbnb, Vrbo, Booking.com, Plum Guide or direct-booking sites. It applies to individuals who own (or rent-to-rent) the property — not limited company hosts, who fall under Corporation Tax.
Gross Bookings — Test Carefully
HMRC's MTD threshold is tested on gross property income. For Airbnb that is the full nightly rate plus cleaning and guest service fees, before Airbnb's host service fee is deducted. Multiple-property hosts add all properties together.
- Over £50,000 gross — from April 2026
- £30,000–£50,000 — from April 2027
- £20,000–£30,000 — from April 2028
What You Need to Record Digitally
- Gross booking value per stay (Airbnb / Vrbo / Booking.com / direct).
- Cleaning fees collected from guests (income).
- Airbnb host service fee, Vrbo / Booking.com commission.
- Cleaner and laundry costs.
- Utilities, council tax, broadband, TV licence (apportioned for personal use).
- Replacement furnishings, consumables (toilet roll, coffee, soap).
- Mortgage interest (claimed as a basic-rate tax reduction, not deduction).
- Letting agent or co-host fees, photography, listing tools.
FHL Abolition — What Changed in 2025
The Furnished Holiday Lettings regime ended on 5 April 2025. From 6 April 2025 short-term lets are taxed as ordinary UK or overseas property income. Mortgage interest is now restricted to a basic-rate tax reduction, capital allowances on furniture have stopped for new expenditure, and FHL pension contributions no longer get special treatment.
Rent-a-room relief and the property allowance
Two reliefs can change your position. If you let a furnished room in your own home, Rent-a-Room relief makes up to £7,500 a year tax-free (halved if someone else also receives income from the property). Separately, the £1,000 property allowance means very small amounts of property income may not need reporting at all, or can be deducted instead of actual expenses. These reliefs affect your taxable position, but note the MTD threshold is still tested on gross income — so you can qualify for a relief and still be within MTD if your gross receipts are high.
Quarterly Updates for Property Hosts
Hosts in scope of MTD for Income Tax submit four quarterly updates of property income and expenses — due 7 August, 7 November, 7 February and 7 May — plus a final declaration by 31 January after the tax year. UK and overseas property are reported as separate income sources, and the mortgage finance-cost reduction is applied at the final declaration.
Software That Suits Airbnb Hosts
Look for software that handles multiple properties, multi-currency (for overseas lets) and channel-manager imports. FreeAgent, Hammock and Untied are popular with hosts. Spreadsheet users can use MTD bridging software to keep their existing booking trackers.