The UK Chancellor announced today he is working on new plans to cut the tax bills of thousands of ‘self-starters’ who share their homes to pay the bills. Under the new plans, Airbnb hosts can earn £1,000 tax free additional income by sharing their homes, without having to declare it.
The announcement was made as part of the annual budget statement today, along with similar plans to support regular people who make additional income selling through online marketplaces. Chancellor George Osborne said 700,000 UK residents, most of them on basic rate income tax, will benefit from the plans.
Here’s what he said:
…we’re going to help the new world of micro-entrepreneurs who sell services online or rent out their homes through the internet. Our tax system should be helping these people so I’m introducing two new tax-free allowances each worth £1,000 a year, for both trading and property income. There will be no forms to fill in, no tax to pay – it’s a tax break for the digital age and at least half a million people will benefit.
The UK sharing economy is currently worth £500 million and this is expected to increase to £9 billion by 2025.
This is good news for the growing number of Airbnb hosts in the UK who are sharing their homes, earning a little extra money to pay the bills and bringing new economic benefits to their communities. The UK has set itself as a global leader for the sharing economy and is introducing progressive new rules that empower regular people and promote innovation through technology. We applaud the government for supporting hosts and progressive business models across the country; their leadership on this important issue is an example to the world.
Starting next month, Airbnb hosts who qualify for rent-a-room tax relief will benefit from increased tax free earnings under separate plans announced by the Chancellor last year, which increased the annual threshold to £7,500.