Airbnb ‘subject to tax inquiries’

Airbnb has revealed it is being probed by HMRC over its tax payments, inquiries which may result in legal proceedings.

In the financial reports filed for Airbnb UK, which provides marketing and business support services for Airbnb in the UK, it said: “The HMRC have contacted the company regarding the application of tax laws or regulations impacting the company’s business. The company is also subject to tax inquiries and proceedings concerning its operations and intracompany transactions. Some of these matters may result in litigation.”

Airbnb UK paid tax of £146,059 on revenue of £14.25m for the year to 31 December 2018, up from revenues of £12.1m the previous year, as well as pre-tax profits of £455,076, an increase on £162,810 in 2017.

Meanwhile, Airbnb Payments UK (which processes payments between Airbnb hosts and guests outside the US, China and India) paid tax of $303,823 (£235,846) on reported revenue of $353.7m (£274.6m), up from 2017’s $280.6m, and flat profits of $1.5m (£1.2m).

A spokesperson for Airbnb said: “We follow the rules and pay all the tax we owe in the places we do business. That is true as rules apply today and will remain true for whatever rules apply in future. The Airbnb model is unique and boosted the UK economy by £4.2b last year alone. The vast majority of money generated on our platform stays with hosts and local communities, which makes Airbnb fundamentally different to companies that take large sums of money out of the places they do business. As with many other companies, these are routine checks and we are working closely with HMRC.”

Airbnb Payments UK also said in the report it expects “some decrease” in business should the UK leave the European Union this year.