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Tax experts claim there is no cause for alarm regarding Airbnb

Written by Robert McHugh, on 12th Aug 2015. Posted in Ireland

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In a statement yesterday, experts at Taxback.com have said that although Revenue’s decision to look at Airbnb’s database of hosts, to identify those who have taxable earnings as a result of hosting activities, will sting hosts financially, they are not in trouble with the Revenue for not declaring the income - as the filing deadline for the relevant period has not yet passed.  
 
They claim that because the filing deadline for the 2014 tax year is not until 31 October 2015, there is no cause for alarm, as landlords and Airbnb hosts have plenty of time to report this income via their 2014 tax return. 

Furthermore, they indicate that no penalties, interest or late fees will be due on this income if the return is filed and tax paid over before the due date.

Tax Manager with www.taxback.com, Barry Flanagan says, "Revenue had stated clearly that any income earned through renting out your room/ apartment/ home through Airbnb will be treated as taxable income and must be declared.

"This did come as a bit of a blow to people acting as Airbnb hosts who thought it might be an easy way to earn a bit of cash on the side – many people believed that the activity would fall under the rent-a-room tax relief threshold of €12,000. 

"However, there may still be ways to reduce your tax bill. We are advising people to keep a record and receipts of any expenses incurred through this activity. Revenue have concluded this income should be treated as trading income and therefore it stands to reason that any allowable trading expenses should qualify as deductions in arriving at a taxable trading profit.

"The test for whether the expenses are allowable is the same standard as for any other trade – are the expenses incurred wholly and exclusively for the provision of the service in the ordinary course of business."   
 
Source: www.businessworld.ie 

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