Airbnb facing HMRC enquiries over UK tax activity

United Kingdom: Online short-term rentals platform Airbnb is facing enquiries from HM Revenue & Customs (HMRC) about its ongoing tax situation.

In a note published on Companies House, the company said it had been contacted by HMRC ‘regarding the application of tax laws or regulations’ impacting its business.

This follows the news that the online platform is already facing tax inquiries and proceedings about its business operations and transactions with other parts of Airbnb, such as its Irish parent firm.

The note added that some of those matters ‘may result in litigation’.

This follows revelations last week that Airbnb paid just shy of £600,000 in corporate tax in 2017, based on an annual operating profit before tax of £1.8m across its two UK-based divisions.

In a similar style to other large technology businesses in the UK, such as Facebook and Google, the majority of Airbnb’s business profits in the region are channelled through its headquarters in Ireland.

This is in addition to the news that Facebook’s UK tax bill tripled in 2017 to £15.8m, while PayPal was also hit with an additional €3.1m (£2.7m) corporate tax pay-out after a review conducted by HMRC.

The amount of corporate tax paid by large tech firms in the UK has come under intensified scrutiny in recent weeks, after UK chancellor Philip Hammond put forward plans for a so-called digital services tax.

The proposition was met with public outcry from industry leaders, who said the measures would only impact negatively on smaller British businesses and consumers.

A spokesperson for Airbnb said: “As with many other companies, these are routine checks and we are working closely with HMRC.”

Although HMRC would not comment on identifiable companies, their spokesperson added: “We make sure that large businesses, just like everyone else, pay all the taxes due under UK law and we don’t settle for less.”