Britain hits Airbnb UK with extra US$2.3m tax bill after probe

[LONDON] British authorities hit Airbnb UK with an extra tax bill of US$2.3 million last year, 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 over 1 million pounds (S$1.75 million) in Britain, said it had 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 which resulted in additional tax payable of 1.8 million pounds," 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 travellers with landlords with rooms or entire properties to rent for short-term stays.

Outside of the extra tax bill for last year, the filings showed that Airbnb UK paid 1.1 million in tax on its profits in the year to Dec 31 2019, compared to 146,000 pounds in 2018, though profits also rose sharply over the year to 5.6 million pounds from 455,000 pounds.

"We are committed to working in partnership with governments... and we will continue to work collaboratively with HMRC," Airbnb said.

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The company also said it would partner with HMRC and share data on the earnings of hosts for its platform covering 2017/18 and 2018/19.

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.

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

"We have taken steps in 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