Important information about the new HMRC regulations

Following the new regulations introduced by HM Revenue & Customs, self-catering agencies and online booking platforms will now be required to collect certain personal details from individual property owners.

The changes came into effect in 2024, and require booking platforms such as Classic Cottages, AirBnB and others to automatically report owner income to HMRC.

Within this guide, we explain what these changes mean for you as a property owner and why we are requesting this information from you. 

Why are these changes happening?

The UK government has set out to improve tax compliance by making income information reporting an automatic process. Previously, online booking platforms were required to report information on owner income to HMRC upon request.

It is important to note that this law does not change how much tax you need to pay or how you pay it. It has been put in place to ensure income is reported more efficiently and transparently to HMRC. 

HMRC have produced their own guidance on these changes, which can be found here.

What information will be reported to HMRC?

1. Property details: including street address, and land registry number if it is available.

2. Individual owner details: Full name, primary address, date of birth, bank account details, and any known tax identification numbers. 

3. Company details, if applicable: Legal name, address, company registration number, and tax identification number.

4. Income information: HMRC refers to income as ‘Consideration’—any cash, credit, or equivalent paid to you as the property owner. We are required to report the net income (after deducting fees, commissions, and taxes) and the breakdown of deductions. Our reporting must be done on a cash basis, not on an accrual basis. 

We would like to reassure you that Classic Cottages will be storing this additional owner information safely and securely against existing records in our system. We will be in touch with you when we require this information if we do not currently have it.

Key Dates and Deadlines

First annual report: We must submit our initial report by 31st January 2025, covering income earned from 1 January to 31 December 2024.

Transitional period: Owners contracted with Classic Cottages prior to 1 January 2024 will fall within a transitionary period. For these owners, the first reporting date will be 31 January 2026, covering income earned in 2025. 

FAQs

Does this apply to all owners who market their holiday let through a platform?

Yes. These regulations apply to all platforms involved in the sales of goods and services. The only exclusions are non-profit models, Government entities/local authorities, large hotel providers, and quoted companies. 

My short term let is owned by a company. Do we need to do anything differently?

We will be required to report the necessary information about your company. We will ask you to verify the information we hold before we report this.

I am not resident in the UK – does this affect me?

Yes. Income earned in the UK by all owners, regardless of where they live, must be reported to HMRC. It's essential to ensure that all the necessary information has been provided to us, including any international tax identification numbers.

What happens if I take direct bookings through my own website?

Income from direct bookings made through your own website is not included in this reporting scheme.

Can I report my income to HMRC independently?

While Classic Cottages are required to report your income, you are still responsible for your own tax return. You should include all income from your property or properties in your tax return, regardless of platform reporting.

Does this include all accommodation types?

Yes, this regulation applies to all accommodation types, including glamping.

There are multiple owners of my short term let. Do we need to do anything differently? 

We will report the total income paid to each registered owner, but we cannot break it down into individual shares for each owner.

I am VAT registered – how does this affect me? 

We will report the net amount, which includes VAT if applicable. If we hold it, we will also report your VAT registration number as part of the submission to HMRC.

What happens if an owner does not provide the required information?

If the required details are not provided, we may face penalties from HMRC. 

We hope not to be in this situation and will work with owners to avoid any unnecessary penalties.

How can I ensure my data is reported correctly to HMRC?

Regularly review the income and personal data shared with us via your online owner portal, ensuring all information is accurate and up-to-date.

What should I do if I disagree with the income reported by Classic Cottages? 

Please contact us immediately, and we will work with you to resolve any discrepancies.

Conclusion

As these new HMRC regulations come into effect, Classic Cottages is committed to supporting our property owners through this transition. We encourage all owners to stay informed, provide the necessary details when requested, and ensure compliance with the new requirements.

If you have further questions or concerns, please don’t hesitate to reach out to us at owner.support@classic.co.uk. We appreciate your cooperation and look forward to working together during this process.