Airbnb host tax after the end of furnished holiday lets

Airbnb hosts are now taxed like any other landlord. The furnished holiday lettings (FHL) regime ended on 6 April 2025 for Income Tax and Capital Gains Tax, and on 1 April 2025 for companies, so short-let income goes into an ordinary property business. Two reliefs still help small hosts: the Rent a Room Scheme for rooms in your own home, and the £1,000 property allowance.

What changed when the FHL regime ended?

The tax breaks that made holiday lets different from long lets have gone. HMRC’s clarification on the abolition and the Property Income Manual at PIM4165 set out the effect.

Two transitional points matter. Spending already in a capital allowances pool by 5 April 2025 can still get writing down allowances until the pool is used up. And for contracts made on or after 6 March 2024, anti-forestalling rules can block Business Asset Disposal Relief on a later sale. Our guide to furnished holiday let tax rules covers the old regime in more detail.

Which tax-free allowance applies to you?

The right relief depends on what you let and how much you earn. Use this list to find yours.

• You let a furnished room in the home you live in. The Rent a Room Scheme gives up to £7,500 a year tax-free, or £3,750 each if the income is shared. GOV.UK says it covers bed and breakfast and guest house hosts. See our guide to rent-a-room relief.
• You let a separate property and earn £1,000 or less gross. The property allowance covers it in full, and you do not need to tell HMRC.
• You earn more than £1,000 from a separate property. You can deduct the £1,000 allowance instead of expenses, or claim your actual expenses. You cannot claim the allowance and the finance cost credit together.
• Your costs are high. Claiming actual expenses is usually better, and it is the only way to create a loss.

Which expenses can Airbnb hosts claim?

You can deduct revenue costs incurred for the letting. Typical examples are:

• Airbnb service fees and other platform commission
• cleaning, laundry and changeover costs
• utilities, council tax or business rates, broadband and insurance while the property is let
• repairs and maintenance
• replacement furniture, appliances and linen under replacement of domestic items relief

If you or your family use the property yourself, only the share of costs that relates to the letting is allowable. Mortgage interest is not an expense; it gives a basic rate tax credit instead. Our list of landlord allowable expenses has more detail.

How much tax will you pay?

Profits are added to your other income and taxed at your marginal rate. In 2026/27 that is 20%, 40% or 45% in England, Wales and Northern Ireland.

From 6 April 2027, Budget 2026 sets separate property income rates of 24%, 44% and 49%, with the finance cost credit given at 24%. The Budget 2026 landlord measures explain the change, and our property income tax calculator compares the two years.

Does Airbnb tell HMRC what you earn?

Yes. Under the digital platform reporting rules that started on 1 January 2024, platforms collect your name, address, date of birth, National Insurance number, the address of each property and your earnings by quarter. They send it to HMRC by 31 January after each calendar year, as HMRC’s platform seller guidance explains. There is no small-seller exclusion for property rentals. See digital platform reporting.

Do you need to register for VAT or MTD?

Possibly, for larger hosts. HMRC’s VAT Notice 709/3, updated 27 October 2026, says holiday accommodation is standard-rated whatever the length of stay. You must register once taxable turnover passes £90,000 in a rolling 12 months.

Making Tax Digital for Income Tax uses gross income before expenses. If your self-employment and property income was over £30,000 in 2025/26, you join from 6 April 2027; over £20,000 in 2026/27, you join from 6 April 2028. Our MTD guide for landlords explains the steps.

What to do now

1. Check your 2025/26 figures. That is the first full year without FHL treatment, and the return is due by 31 January 2027.
2. Decide on rent-a-room or expenses. Compare the £7,500 exemption with your real costs.
3. Match your records to the platform report. HMRC will see the same figures Airbnb sends.
4. Check your MTD start date. Add up gross property and trading income for 2025/26.
5. Review your pension plans. Short-let profits no longer count as relevant earnings.

Frequently asked questions

Is Airbnb income still a furnished holiday let?

No. The FHL regime ended on 6 April 2025, or 1 April 2025 for companies, so Airbnb lets are taxed as an ordinary property business.

Can I use rent-a-room relief for Airbnb?

Yes, if you let furnished accommodation in the home you live in. The exemption is £7,500 a year, or £3,750 if you share the income.

Can I still deduct mortgage interest on a holiday let?

Not as an expense. Individual hosts get a tax credit at the basic rate of 20%, rising to 24% from 2027/28 under Budget 2026. Companies are not restricted.

Do I pay tax on Airbnb income under £1,000?

No. If your gross property income is £1,000 or less, the property allowance covers it and you do not need to tell HMRC, though you should keep records.

Will HMRC know about my Airbnb income?

Yes. Airbnb and similar platforms report hosts’ details, property addresses and earnings to HMRC by 31 January each year.