Revenue is cracking down on homeowners who let rooms through accommodation website Airbnb.
Last year an estimated 23,000 people in the Republic earned €115 million from letting all or part of their homes through Airbnb, which began supplying Revenue with information on Irish hosts’ income in 2015.
Revenue has recently written to homeowners who have let rooms telling them that their tax affairs are under investigation.
Its notices state that the investigation’s scope covers all taxes and duties, including income from providing short-term accommodation, in the years 2014, 2015 and 2016.
While Revenue does not refer to Airbnb, tax advisers agree that it is investigating income earned from letting rooms through the website.
They say they are seeing new clients who have received these notices within the last month.
One firm, Taxback, recently warned that figures indicated that some hosts were not informing Revenue of their income, despite Airbnb's own efforts to warn clients of their obligations.
Anyone found not to have declared Airbnb income to the Revenue will be liable for tax, interest and penalties.
Advisers acknowledge that Revenue’s move is “no surprise” given that Airbnb began providing information to the tax authorities three years ago.
A Revenue statement denied there was a specific investigation. “However, it is normal Revenue practice to profile cases for intervention based on risk and using a wide range of Revenue and other information,” it said.
Third-party information
The statement added that this included third-party returns, indicating this could include information such as details provided by Airbnb.
Revenue’s notices warn homeowners to make all records from the period available to it.
“The books and records should include all details of your income and expenditure including all income from property or related activities,” Revenue says.
“You should provide full particulars of all bank accounts held solely or jointly in your name together with bank statements for the relevant period(s).”
It concludes that as a Revenue investigation has begun, the taxpayer can no longer make a qualifying disclosure.
This allows people being audited to tell the Revenue up front of anything that they think is relevant.
Making a qualifying disclosure allows anyone, whose taxes, interest and penalties come to more €35,000 or more, can avoid having their details published in the tax defaulters’ list that Revenue issues every three months.
Tax adviser Brendan Brady of Brendan Brady & Associates, pointed out that investigations are the "most serious end" of Revenue activities. "It suggests that they have information on you already," he said.
Mr Brady suggested that some taxpayers could potentially reach the threshold where their details would be published on the defaulters’ list.
He explained that most involved would be on the higher income tax rate, meaning that they would owe about half what they earned from Airbnb to the taxman.
He pointed out that if someone earned €15,000 annually from Airbnb lettings over several tax years, they would be liable for tax.
“It’s not beyond the realms of probability that over two or three tax years, by the time they add in interest and penalties, that they would reach the threshold,” he said.
