Homeowners in London making money from illegal Airbnb-style lets face new tax-led crackdown

Owners of Airbnb-style properties in London who are flouting rules on short-term lets face a new tax-led clampdown.

Westminster City Council is seeking to gain access to HMRC data to identify homeowners who are operating illegally.

The council’s leader Paul Swaddle has written to Cabinet minister Pat McFadden calling for such co-operation to tackle the huge number of short-term lets in the capital’s centre suspected of flouting the 90-day rule.

(Alamy/PA)

Thousands of homeowners in London are suspected of illegally renting out their property in illegal Airbnb-style lets

Cllr Swaddle highlighted how the National Fraud Initiative, a public/private sector scheme to share information to clamp down on fraud, is in talks with HMRC about a data-sharing agreement.

“Once in place, this would enable Westminster Council to seek access to the HMRC data provided through the NFI to support the detection of fraudulent activity relating to short-term lets (STLs), as well as facilitate more effective planning enforcement,” he explained.

Many Londoners make money by renting out their home or other properties on Airbnb, Booking.com or other platforms to tourists and other visitors.

Westminster estimates that there are more than 13,000 short-term rental properties in the borough.

Councillor Paul Swaddle

Westminster City Council

Cllr Swaddle stressed that accessing tax details would boost the local authority’s work to ensure compliance with short-term letting controls and could lead to more “intelligence gathering and enforcement”.

He outlined how it would also enhance the council’s action, working with the Cabinet Office and Airbnb, to speed up a crackdown on illegal short-term letting in social housing and council-owned properties.

“Matching addresses and income indicators could help identify properties that should not be used as short-term lets at all and allow us to restore them to their purpose of housing individuals and families who are waiting for a home,” he said.

The National Fraud Initiative matches electronic data within and between public and private sector bodies to prevent and detect fraud.

In a recent move, it now collects and collates data provided by Airbnb to establish fraud in social housing, with Westminster council welcoming the co-operation from the home rental platform.

The local authority believes that if it can match HMRC, council and booking data for short-term lets, it will have a “more effective chance of establishing fraud” where it is taking place.

Gaining access to the HMRC information could also allow it to step up action to clamp down on rogue businesses such as candy stores which are avoiding paying business rates, selling dodgy goods and breaking other financial laws.