New HMRC Regulations for Short-Term Letting Platforms

Crabpot Cottages is preparing for new regulations from HMRC that will take effect on January 1, 2024, impacting self-catering agencies and online booking platforms. These changes require the automatic quarterly reporting of property owners’ income and personal information to HMRC, starting in 2024. The first full annual report will be due by January 31, 2025. There is a transitional period for owners contracted before 2024, delaying their reporting obligations until 2025. Non-compliance will result in penalties.

Overview of Key Changes

Automatic Reporting to HMRC: Self-catering agencies like Crabpot Cottages will be required to automatically report property owners’ income and personal details to HMRC on a quarterly basis. This is a significant change from the current system, where owners typically report their earnings through annual tax returns.

First Reporting Deadline: For the 2024 calendar year, the first full annual report is due by January 31, 2025. This report will cover all income generated through the platform during 2024.

Transitional Period: Property owners who were already contracted with Crabpot Cottages before the start of 2024 will benefit from a transitional period. This means they will not be required to report their income for 2024, with their first reporting obligation starting in 2025.

Penalties for Non-Compliance: HMRC has made it clear that penalties will apply for non-compliance with these new regulations. This underscores the importance for both Crabpot Cottages and property owners to adhere to the new rules.

Impact on Property Owners

For property owners using Crabpot Cottages, this means that income reporting will become more streamlined, but it also requires them to be diligent about ensuring that their details are accurately reported to HMRC. They will need to ensure that all relevant information is provided to Crabpot Cottages to avoid any potential issues with compliance.

These regulatory changes reflect HMRC’s broader efforts to ensure transparency and accuracy in income reporting across the self-catering and holiday let sector. By automating the reporting process, the goal is to reduce errors and enhance tax compliance within the industry.

Action Steps for Owners

Update Your Information: Ensure that all your personal and income-related details with Crabpot Cottages are up-to-date.

Understand Your Reporting Obligations: If you were contracted before 2024, take note of the transitional period but prepare for mandatory reporting in 2025.

Seek Advice if Necessary: If you’re unsure about how these changes affect you, consider seeking advice from a tax professional.

Platforms will be required to report specific details to HMRC, including:

• The company’s registered name, address, and Tax ID number.
• Details about each property listed, including street address and land registry number if available.
• Owner information, which includes full name, primary address, date of birth, bank account details, and any known tax identification numbers.
• Further information on the reporting rules, including details on compliance and tax obligations, will be available through the appropriate channels provided by HMRC.

Crabpot Cottages is committed to supporting its property owners through these changes and will provide further guidance as needed to ensure a smooth transition to the new system.

For more information from HMRC please use this link.

https://www.gov.uk/guidance/selling-goods-or-services-on-a-digital-platformo get started, we’re here to help you make the most of your property and start earning from your holiday let.