Picture: 123RF/JAN MIKŠ
Picture: 123RF/JAN MIKŠ

London — British authorities hit Airbnb UK with an extra tax bill of £1.8m in 2019, the home rental company’s accounts showed on Tuesday, following an investigation into the firm.

The UK arm of the San Francisco company, which also paid annual corporation tax of more than £1m in Britain, said it paid the extra obligations after a request from British tax authorities Her Majesty’s Revenue and Customs (HMRC).

“During 2019, the company received a revised assessment from HMRC that resulted in additional tax payable of £1.8m,” Airbnb UK said in their accounts, which were reviewed by Reuters, after two years of contact with HMRC about its tax arrangements.

The US company’s tax affairs have drawn closer scrutiny globally as it has grown into one of the marquee names of the digital economy with a business that has disrupted the hotel industry by linking travelers with landlords with rooms or entire properties to rent for short-term stays.

As well as the extra tax bill for in 2019, the filings showed that Airbnb UK paid £1.1m in tax on its profits in the year to December 31 2019, compared to £146,000 in 2018, though profits also rose sharply over the year to £5.6m from £455,000.

“We are committed to working in partnership with governments ... and we will continue to work collaboratively with HMRC,” Airbnb said. The company also said it would partner with HMRC and share data on the earnings of hosts on its platform covering 2017/2018 and 2018/2019.

Airbnb has faced pressure from governments and regulators around the world to ensure that the users of its platforms — private individuals who offer their homes as short-term lets — pay the appropriate taxes.

The HMRC is expected to address any issues over hosts’ payment of tax in 2021/2022.

“We have taken steps in the HMRC to consider sectors, such as short-term property letting, where we may not be collecting the full amount of tax owed,” HMRC said in a statement regarding the data-sharing agreement.

“We appreciate this is a rapidly evolving sector and we are working in partnership with companies, such as Airbnb, to address the tax consequences of these changes with a commitment to creating a level playing field for all.”

Reuters

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