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fru-gal

Spring statement: Airbnb hosts face taxation crackdown

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This is from about a month ago, but couldn't find anything on the forum about it. It's obviously a no-brainer which means it probably won't go ahead (no doubt plenty of greedy MP-landlords will veto it).

This would kill two birds with one stone. Collect tax automatically from all these entrepreneurs renting out their spare properties on Airbnb and free up some much needed rentals for normal tenants (not tourists) in the capital where owners advertising on Airbnb and other companies like them have hoovered up a lot of former long-term rental properties to convert into quick and easy money short term rentals. 

From The Times;

https://www.thetimes.co.uk/article/airbnb-hosts-face-taxation-crackdown-msscdj6pt

Quote

Homeowners who rent out their property on sites such as Airbnb face having their income automatically declared to the taxman under a digital crackdown proposed by ministers.

As part of a consultation launched yesterday the Treasury said that it was considering forcing online platforms to provide details of users’ income directly to HM Revenue & Customs, or even taking the money at the source.

The move could affect not only those renting out properties or rooms but also car-share schemes and self-employed workers such as childminders who offer their services through online portals.

The Treasury said its research showed that more than half of people using “sharing sites” did not regard the income they made as taxable. It claimed that the proposed measures would make it easier for people to fulfil their tax obligations while cracking down on a “dishonest minority”.

At the same time the government also announced radical plans to start taxing big technology companies, such as Google and Facebook, on the revenue they generate from selling advertising to UK users rather than on their profits.

The move is an attempt to crack down on so called profit-shifting, whereby multinationals declare the majority of their profits in low-tax jurisdictions by booking their advertising sales abroad.

Facebook, for example, paid £5.1 million in corporation tax on its UK operations last year on revenues of £842.4 million. Google paid £36.4 million on UK revenues of about £1 billion.

Under the plans HMRC would tax companies on a proportion of their revenues based on the number of users they have in the UK.

The government argues that social media companies in particular are making money based on “content” such as tweets and Facebook posts generated by British users and as such can be legitimately taxed on the revenue generated. The potential tax would apply even if the company had no physical presence in the UK.

Announcing the plan in a consultation document the Treasury described the move as an “interim” measure while Britain negotiates with other countries on a new multinational agreement for taxing technology firms.

However, hopes of an early deal are not high and the government is concerned that it needs to act now.

The Treasury said that if any measures were put in place there would be protections for small firms and start-ups. A spokesman said: “We understand that there is public frustration about a perception that digital companies don’t pay what they owe.

“As the economy changes, the tax system needs to change to try and keep up with it and we need to keep moving.

“We are not going to implement anything immediately; we are still working out the best way to do this and we don’t want to choke off the UK being a hub for digital innovation.”

The government also announced plans to crack down on VAT fraud by sellers on online marketplaces such as Amazon and eBay. Under another proposal a proportion of all credit card payments on online sales would be diverted automatically to HMRC to cover VAT payments.

 

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There is IMO only one way to catch the criminals who convert homes [OO or rentals] to short term rentals.

The way is to impose a nightly tourist tax - even one pound does the trick - and require short term [less than 6mo] rentals to be registered in order to pay that tax. Teams of law enforcement can then go knocking in resposnse to complaints from neighbours for the "non-resident-behaviour" of the tourists and use POCA to take 100% of illegal income from anyone not correctly registered. Those who register are in London then allowed only their 60 days a year. That is already the rule but unenforceable, could also be reduced IMO to 45 or even 30.

This is not a blue sky idea, it's already done exactly this way in other euro-capitals.

 

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At the risk of diverting this thread, no one seems to have commented that if we cease to have uncontrolled free trade with EU and EEA countries, the [US and other] multinationals will no longer be able to move all their profits to Dutch-Irish sandwiche structures, use Luxembourg or Swiss post box companies etc. in order to avoid tax.

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There's already rules that aren't enforced.

Simply... there's no money to enforce it.

And all this will do is put real owners and letters under the jackboot... it will do nothing to deter criminal and fraudsters.

Call of imposing more taxes... come on... from this forum?

Having folk just getting nasty(er) and clype on each other?

What a dystopian nightmare this country is turning out to be. Awful.

 

 

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Just now, cashinmattress said:

There's already rules that aren't enforced.

Simply... there's no money to enforce it.

And all this will do is put real owners and letters under the jackboot... it will do nothing to deter criminal and fraudsters.

Call of imposing more taxes... come on... from this forum?

Having folk just getting nasty(er) and clype on each other?

What a dystopian nightmare this country is turning out to be. Awful.

 

 

Well taxation of 1 pound per night is hardly extra tax. Lets call it the rule enforcement admin charge instead if it makes you feel more comfortable. The main purpose is to create a system where council is able to enforce rules.

ATM, they dont't [I have reported an airbnb-er local to me who has 10+ units in zone1 and 2 london, the council response was airbnb now restrict no of nights per year, the "businessman"'s response is that he uses booking.com as well now].

When somone is causing rubbish to be dumped outside your door and left days or weeks before it's collected or 3am noise on schoool nights as tourists schedules clash with the average residents all so that an airbnber can make a buck, are you a dystopian clype nightmare for wanting the problem behaviour changed? I feel really sorry for the flat below with shared hall which has just been sold to someone who is probably not yet aware.

Isn't it desirable there are agreed rules you all sign up to when living in close proximity?

Maybe the answer depends whether you're happy trying to make a buck which happens to not be within the rules and costs others their basic living standards?

Thanks for the new word. How to I change my ID to DystopianClypeNighmare?

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40 minutes ago, cashinmattress said:

There's already rules that aren't enforced.

Simply... there's no money to enforce it.

And all this will do is put real owners and letters under the jackboot... it will do nothing to deter criminal and fraudsters.

Call of imposing more taxes... come on... from this forum?

Having folk just getting nasty(er) and clype on each other?

What a dystopian nightmare this country is turning out to be. Awful.

 

 

They don't need to do much to enforce it, just tax the transaction first (as was the case with all interest on savings accounts until recently) and anyone who shouldn't be paying tax or paying the wrong rate can claim back from HMRC. Much better than possibly millions of people not paying tax because it isn't enforced. Also I would imagine this is pretty easy to implement and would bring in loads of tax for the Treasury. How is it nasty to expect people who are providing a service that they should be paying tax on to pay tax? Do you think it is fair that someone on £20k is forced to pay PAYE and NI whilst a boomer in a 5 bedder can decide if they want to pay tax on their rental income?

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2 hours ago, ebull said:

At the risk of diverting this thread, no one seems to have commented that if we cease to have uncontrolled free trade with EU and EEA countries, the [US and other] multinationals will no longer be able to move all their profits to Dutch-Irish sandwiche structures, use Luxembourg or Swiss post box companies etc. in order to avoid tax.

Which one do you want?

Man? Jersey? BVA? the list goes on

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14 hours ago, fru-gal said:

They don't need to do much to enforce it, just tax the transaction first (as was the case with all interest on savings accounts until recently) and anyone who shouldn't be paying tax or paying the wrong rate can claim back from HMRC. Much better than possibly millions of people not paying tax because it isn't enforced. Also I would imagine this is pretty easy to implement and would bring in loads of tax for the Treasury. How is it nasty to expect people who are providing a service that they should be paying tax on to pay tax? Do you think it is fair that someone on £20k is forced to pay PAYE and NI whilst a boomer in a 5 bedder can decide if they want to pay tax on their rental income?

Hmmm...

The 'boomer in a 5 bedder can decide if they want to pay tax on their rental income' is actually breaking the law. The HMRC  decides if you are to pay tax by your claim. If they aren't claiming (and by virtue asking for relief, etc) then they are breaking the law.

And the transactions are taxed.... first. Go do your research.

I'll repeat. Extra layers of regulation will do very little in the way of deterring crooks.... and just unfairly punish the legit little guys.

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49 minutes ago, cashinmattress said:

Hmmm...

The 'boomer in a 5 bedder can decide if they want to pay tax on their rental income' is actually breaking the law. The HMRC  decides if you are to pay tax by your claim. If they aren't claiming (and by virtue asking for relief, etc) then they are breaking the law.

And the transactions are taxed.... first. Go do your research.

I'll repeat. Extra layers of regulation will do very little in the way of deterring crooks.... and just unfairly punish the legit little guys.

That is the whole point of potentially bringing in this change...because so many landlords/Airbnb owners aren't paying the right tax. They are not already doing this, hence the consultation. If they were already doing this they wouldn't need to consult on it. It is up to the landlord/owner to declare and many of them don't declare and enforcement has been very very lax up to now (1/2 of all landlords in Newham alone found to be not declaring their rental income).

Quote

I'll repeat. Extra layers of regulation will do very little in the way of deterring crooks.... and just unfairly punish the legit little guys.

I don't agree with you on this.

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16 hours ago, ebull said:

Well taxation of 1 pound per night is hardly extra tax. Lets call it the rule enforcement admin charge instead if it makes you feel more comfortable. The main purpose is to create a system where council is able to enforce rules.

ATM, they dont't [I have reported an airbnb-er local to me who has 10+ units in zone1 and 2 london, the council response was airbnb now restrict no of nights per year, the "businessman"'s response is that he uses booking.com as well now].

When somone is causing rubbish to be dumped outside your door and left days or weeks before it's collected or 3am noise on schoool nights as tourists schedules clash with the average residents all so that an airbnber can make a buck, are you a dystopian clype nightmare for wanting the problem behaviour changed? I feel really sorry for the flat below with shared hall which has just been sold to someone who is probably not yet aware.

Isn't it desirable there are agreed rules you all sign up to when living in close proximity?

Maybe the answer depends whether you're happy trying to make a buck which happens to not be within the rules and costs others their basic living standards?

Thanks for the new word. How to I change my ID to DystopianClypeNighmare?

Welcome to my world of approaching 40% holiday lets.

Last few years have seen furnished holiday lets getting an insane ammount of dumb money poured into them. My local area sees about half house sales go to FHL.

A mate lives between two. Jul to Aug party, drunk, smashing.

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16 hours ago, winkie said:

There is nothing stopping someone turning their house into a hotel...... friends innit.;)

A hotel, yes - planning rules.

Holiday let - no.

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2 minutes ago, winkie said:

What if no money passes hands?;)

Thats called kids coming back from Uni....

Planning needs to be used to sort out airbnb and fhls.

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30 minutes ago, spyguy said:

Thats called kids coming back from Uni....

Planning needs to be used to sort out airbnb and fhls.

I don't disagree, other countries have or are sorting it..... can't see why we can't to be honest......that is if there is a will to.;)

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3 hours ago, spyguy said:

Welcome to my world of approaching 40% holiday lets.

Last few years have seen furnished holiday lets getting an insane ammount of dumb money poured into them. My local area sees about half house sales go to FHL.

A mate lives between two. Jul to Aug party, drunk, smashing.

As I've mentioned numerous times on here - it's fast becoming a blight on the UK on a similar lever to BTL. 

2 hours ago, winkie said:

I don't disagree, other countries have or are sorting it..... can't see why we can't to be honest......that is if there is a will to.;)

Let's have a think about those in central and local government who make the rules. 

They will be up to their knees in air BnB. 

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https://www.moneysavingexpert.com/news/family/2018/07/new-laws-set-to-close-tax-free-loophole-on-airbnb-lets

"This legislation illustrates our commitment to creating an environment in which innovation and enterprise can thrive, while ensuring that everyone plays by the same rules."

The Government says the draft bill, which was published today, also includes measures to help taxi drivers to buy cleaner vehicles, remove barriers for investment in the oil and gas industry, and tackle tax avoidance.

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On 27/04/2018 at 16:25, cashinmattress said:

There's already rules that aren't enforced.

Simply... there's no money to enforce it.

And all this will do is put real owners and letters under the jackboot... it will do nothing to deter criminal and fraudsters.

Call of imposing more taxes... come on... from this forum?

Having folk just getting nasty(er) and clype on each other?

What a dystopian nightmare this country is turning out to be. Awful.

 

 

Not 'imposing more taxes' though, is it hmmmm?

Just getting people to pay the income tax they owe , so we can fund education, healthcare, police, fire service, infrastructure maintenance etc. etc. you know the kind of stuff we take for granted but needs to be payed for?

Strange that you view the financing of the country's democratic infrastructure as 'nastiness' or the collection of tax as a 'dystopian nightmare' (hyperbolic somewhat..?)- too much time on the Taxpayers' Alliance propaganda site or listening to the Koch brothers, methinks!

This country WILL become a 'dystopian nightmare' however, if people aren't willing to put in and pay their fair share - which is all this measure is - sensibly - intended to ensure.

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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