How is Airbnb income taxed in the UK?

Airbnb income is property income. Since 6 April 2025 short lets are taxed like any other let, though letting in your own home can be tax-free up to £7,500 a year under Rent a Room.

Letting the home you live in has its own relief. A whole flat or cottage you do not live in is part of your property business, alongside any long-term lets. The figures below come from GOV.UK, checked on 17 October 2026.

Which rules apply to you

The furnished holiday lettings rules used to give holiday lets extra reliefs. They ended on 6 April 2025, and our page on what happened to furnished holiday lettings covers the changes, including mortgage interest.

Letting in your own home

The Rent a Room scheme lets you earn up to £7,500 a year tax-free from furnished accommodation in your home. It is automatic if your income is below the limit. GOV.UK says you can also opt in if you run a bed and breakfast or a guest house, but the scheme cannot be used for homes converted into separate flats. In our reading, short-stay guests in your own home count the same way as a lodger, because the test is that the accommodation is furnished and in your main home. GOV.UK says you can let as much of your home as you want, so letting all of it while you are away can count. HMRC says it must be your only or main home at some point in the letting period, looks critically at second homes and holiday homes, and does not normally allow it if you live abroad. If you only let part of your home now and then through a short-term rental app, GOV.UK suggests checking whether you need to tell HMRC at all. The Rent a Room guide has the detail.

The £1,000 property allowance

For lets outside Rent a Room, the property allowance covers up to £1,000 a year of gross income, which means the total before any costs. You cannot deduct any other expenses if you claim it, and GOV.UK says you cannot use it in a year you claim the tax reduction for mortgage interest or other finance costs on a residential property. It cannot be used on income from Rent a Room either. It suits someone who lets a whole place for a few nights a year with low costs.

When it might be a trade

Most hosts run a property business, not a trade. In our reading, letting could be a trade only where you provide services well beyond what a host normally offers, more like a hotel. That is rare for a typical Airbnb and turns on the facts, so if you provide meals and daily services on a large scale, get it checked.

What counts as income and what you can claim

In our reading, your income is what you charge guests, including any cleaning fee, before the platform's host fee. A service fee guests pay the platform on top is not your income. Host fees, cleaning, laundry, linen, utilities, guest supplies and repairs are costs you deduct when working out profit, as long as they are for the let. The government's note on the end of the holiday let rules confirms that day-to-day costs such as cleaning products and toiletries for guests are still claimed as before. The landlord expenses guide covers what counts.

Platforms also report hosts' details and earnings to HMRC under the reporting rules for digital platforms. GOV.UK's small-seller exception does not apply to letting property. The platform reporting guide explains what is sent and why it does not replace your own records.

What this means for you

Take a host who lets a one-bedroom flat they do not live in through Airbnb. In the 2025-26 tax year the host's bookings came to £34,000 before fees, and the host was under £50,000 in 2024-25. The platform kept £1,000 in fees, cleaning and laundry cost £4,000, and bills, insurance and repairs came to £5,000.

The host pays tax on the £24,000 profit, at their usual rates once it is added to other income. For Making Tax Digital for Income Tax (MTD), GOV.UK says qualifying income is the amount before expenses. In our reading that means the £34,000 counts, not the £33,000 payout or the £24,000 profit. GOV.UK says qualifying income over £30,000 for the 2025-26 tax year means MTD from 6 April 2027, so that is when it starts for this host. Bookings in 2026-27 do not decide that date. GOV.UK also says landlords must annualise property income themselves when working out qualifying income.

If the same host instead let a spare room in their own home for £6,000 a year, that would be under the £7,500 limit and tax-free with nothing to do and, in our reading, outside MTD.

Steps for Airbnb hosts

1. Work out which row of the table you are in: letting in your own main home, or a separate property.
2. Download your booking history from each platform and total what you charged guests for the tax year, before the platform's host fee and leaving out any service fee guests paid the platform.
3. Keep a record of every cost: platform fees, cleaning, laundry, supplies, bills and repairs.
4. Compare Rent a Room, the £1,000 allowance and claiming actual costs plus any mortgage interest tax reduction, and use whichever leaves less tax. You cannot have the allowance and the mortgage interest reduction in the same year.
5. Add your gross bookings to any self-employed turnover and run the free MTD check. In our reading, own-home bookings under the Rent a Room limit are left out, as they do not go on a tax return.

The landlord section has more guides for small landlords and short-let hosts.