Follow rules and pay all the tax we owe, clarifies Airbnb
Disruptive accommodation website, Airbnb, has paid only £188,000 in UK corporation tax last year despite earning more than £600mn in rentals for property owners, reports suggest.
In the UK, the company books the commissions it collects from renters and landlords through an Irish subsidiary. The subsidiary has two more offshoots in Britain namely Airbnb Payments UK, which made a pre-tax profit of £960,000 last year and paid £188,000 in corporation tax, while the other, Airbnb UK, made a loss so did not pay the corporation tax. Airbnb Payments UK reportedly handles payments between landlords and travellers for countries other than the United States, China and India.
Airbnb has stated: “We follow the rules and pay all the tax we owe… Our UK office provides marketing services and pays all applicable taxes, including VAT. The Airbnb model is unique and boosted the UK economy by £3.46bn last year alone.”
While the company has disrupted the hotel industry by linking travellers with landlords who generally want to rent out a spare room or an entire property for short-term stays, the tax arrangements of similar technology giants have come under the scrutiny of European Union competition commissioner recently.
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For each booking, Airbnb charges a 3% commission from landlords while also charging a fee from travellers. But the company has stated: “The overwhelming amount of money generated by the Airbnb platform stays with local hosts and their communities, and is subject to local tax.”
In the UK last year, Airbnb catered to 5.9m travellers and had 168,000 listings.