Authorities Continue to Question Airbnb as UK Tax Bill Shrinks

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Enquiries into Airbnb’s UK tax structure have continued to plague the short-term holiday rental giant, even as its payouts to HM Revenue & Customs (HMRC) have decreased.

Airbnb said it remains subject to “tax enquiries and proceedings concerning its operations and intracompany transactions”, filings seen by City A.M. reveal. It has also been contacted regarding its application of tax laws, “some of which may result in litigation”.

The tech firm paid out just £449,802 in corporation tax in the year ending December 2018, falling from £477,284  a year earlier when HMRC first began its questioning. However, Airbnb’s profit for last year rose to almost £2m, up 17 per cent from its £1.7m income in 2017.

Like other large tech businesses with a presence in the UK, such as Facebook and Google, the majority of Airbnb’s profits in the region are channelled through its Ireland headquarters. Its UK entities mainly look after operational costs.

Airbnb added that its continued operation via Airbnb Ireland is under “legislative risk”, as the status of legislation governing the firm “remains vague at best”.

The company has come under pressure in a number of European regions to ensure its users pay the appropriate tax for letting out their properties to holidaymakers. A legal challenge earlier this year which sought to classify the company as a real estate agent under French law was unsuccessful.

A spokesperson said: “We follow the rules and pay all the tax we owe in the places we do business.

“Airbnb’s UK office provides marketing services and pays all applicable taxes. The Airbnb model is unique and boosted the UK economy by £4.2n=bn last year alone. The vast majority of money generated on our platform stays with hosts and local communities, which makes Airbnb fundamentally different to companies that take large sums of money out of the places they do business.”

The spokesperson added that the tax enquiries are “routine checks”.

Airbnb said earlier this month it will court a US stock market flotation in 2020. Several tranches of shares awarded to long-standing employees are set to expire in November 2020 and in mid-2021, providing the company with a looming deadline.

Written by Emily Nicolle for cityam.com.

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