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LadyG

AirBnB

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hi, I use the facility in the UK, its like BnB  but different, in my case better.

I wondered HMRC is taking notice,, wot I was considering, was renting a house, filling it with folks to pay the rent?

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If the question is do I need to declare it - then yes you do. 

 

There's a very good data trail for them to follow. 

 

You really don't want an HMRC Investigation. 

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32 minutes ago, cougie said:

 

You really don't want an HMRC Investigation. 

I know that!

it's just that I was wondering if it is a  viable business 

Edited by LadyG

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It depends where you are surely. Tourist trap or in the middle of nowhere. 

 

How many rooms would you have and what facilities ? 

 

There's no guarantee that you'll be full all of the time. 

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I'm a bit of a stickler for following the rules so I'm always likely to say no to such things but in this case I can not state strongly enough how much you should really really really not do this. 

 

living in the middle of know where people always think they can do things under the radar and nobody will notice - they always notice. It never ceases to amaze me how well HMRC can sniff out "a little naughty bookkeeping".  Not only that but renting a house and then subletting it as a business will not go down well with your landlord or your neighbours, which is also likely to get you shopped in to the local council who will turn you into HMRC. 

 

If you want to do it as a legitimate business then it's probably easy enough to set up, though it will be hard work, very tying and will eat into your boating time,  but if you want to set it up to fly under the radar then it is probably more hassle then it's worth and likely to get you in a great deal of trouble. Whether or not you make money will depend on how well you run it, the house you choose and the area that it's set in. 

 

Do you have something specific in mind?

 

 

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8 minutes ago, LadyG said:

I know that!

it's just that I was wondering if it is a  viable business 

Lots of people do. I know at least a couple of people (not in the UK, in Australia) who have bought flats/apartments specifically to put on air bnb. I haven't spoken to them in great detail but certainly in Sydney, they seem to have done well. I've also stopped in a few bnbs that have certainly been exclusively for the use of renting out via air bnb so at least a few people are doing this, I bet there are plenty more.

 

It seems to be more popular in the USA and there have been complaints that because so many apartments or houses have been turned into air bnb lodgings, neighbourhoods have been changed and "wrecked" as one article describes.

 

https://skydancingblog.com/2015/05/29/monday-reads-air-bnb-wrecking-neighborhoods-all-over-the-country/

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I  don't want to make a profit, just cover my costs. It would mean selling the boat, which may happen sometime anyways  .................

I'd like to move to Newmarket, my spiritual home .................... but houses are very very expensive..................

I'd just be offering plain and simple, no frills overnight accommodation. From experience, I know this is in great demand.

Edited by LadyG

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Just now, LadyG said:

It would mean selling the boat, which may happen sometime anyways  .................

 

9CA5B94E-9026-4A4C-B2CA-16AE2F0B33CC.jpeg

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Tenancy agreements invariably say "no subletting" so unless you can find a landlord wet behind the ears enough to agree to you subletting, you WILL get your tenancy cancelled as soon as they discover your subterfuge.

 

 

27 minutes ago, LadyG said:

I  don't want to make a profit, just cover my costs. It would mean selling the boat, which may happen sometime anyways  .................

I'd like to move to Newmarket, my spiritual home .................... but houses are very very expensive..................

I'd just be offering plain and simple, no frills overnight accommodation. From experience, I know this is in great demand.

 

Rent a field, put the boat in it, AirBnB the boat.

 

Use the rental income to rent yourself a nice flat in Newmarket.

 

 

 

 

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18 minutes ago, Mike the Boilerman said:

Tenancy agreements invariably say "no subletting" so unless you can find a landlord wet behind the ears enough to agree to you subletting, you WILL get your tenancy cancelled as soon as they discover your subterfuge.

 

 

 

Rent a field, put the boat in it, AirBnB the boat.

 

Use the rental income to rent yourself a nice flat in Newmarket.

 

 

 

 

Here's someone doing soething similar on the Thames

 

image.jpeg.11043a7cce858b9e5214334e40250596.jpeg

 

I kid you not.

I don't see even HMRC having enough cahones to do anything with him - let alone EA who alledgely run the Thames...

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1 hour ago, LadyG said:

I'd like to move to Newmarket, my spiritual home

Have you considered taking your boat on a little adventure? The rivers Cam and Lark are very close to Newmarket. Riverside Island Marina at Isleham is only 10 miles from Newmarket. 

 

http://riversideisland.co.uk/index.html

Edited by Tumshie
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4 hours ago, LadyG said:

hi, I use the facility in the UK, its like BnB  but different, in my case better.

I wondered HMRC is taking notice,, wot I was considering, was renting a house, filling it with folks to pay the rent?

There's someone doing this in a house where I live, renting out to large parties. There is a covenant which the owner has signed up to which disallows such a rental. The neighbours are at their wits end, the owner refuses to acknowledge the complaints, AirBnB care not a jot. Solicitors are struggling to find the route to enforce cessation. There are local governments across Europe attempting to deal with this issue and the effects it has on their communities - apparently also without success.  It seems only the property owner's conscience stands in the way. So, it's open season!

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6 hours ago, LadyG said:

I wondered HMRC is taking notice,,

 

 

Interestingly, one of the bellringers I was chatting with in the pub last night is an IT project manager for a large national UK mortgage lender. He was saying something exercising the board at the moment is the high level of fraud amongst their customers having residential mortgages but renting out their houses without lender permission. Renting exposes the lender to a higher commercial risk and while they agree to customers doing this if asked, they usually apply an interest rate premium to cover this higher risk.  

 

The thing is, this one lender reckons they are losing £120m a year from this type of fraud and the interesting thing is they have come up with a way to positively identify every singe case! His new project is to implement it. 

 

Point being if a lender can now do this, so can HMRC. 

 

  

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16 minutes ago, Mike the Boilerman said:

 

 

Interestingly, one of the bellringers I was chatting with in the pub last night is an IT project manager for a large national UK mortgage lender. He was saying something exercising the board at the moment is the high level of fraud amongst their customers having residential mortgages but renting out their houses without lender permission. Renting exposes the lender to a higher commercial risk and while they agree to customers doing this if asked, they usually apply an interest rate premium to cover this higher risk.  

 

The thing is, this one lender reckons they are losing £120m a year from this type of fraud and the interesting thing is they have come up with a way to positively identify every singe case! His new project is to implement it. 

 

Point being if a lender can now do this, so can HMRC. 

 

  

It would be interesting to hear "how" they are losing the £120m a year.

 

Is this because the mortgages arent being paid, they are repossessing the properties, and not getting back their money plus costs?

 

or is it because, if they actually knew about the situation, they could add a few percent to the interest rate, and it is this, hypothetical money, that they have lost?

 

I'm not saying that the latter case is OK, merely that, perhaps, they protest a bit too much?

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23 minutes ago, Richard10002 said:

or is it because, if they actually knew about the situation, they could add a few percent to the interest rate, and it is this, hypothetical money, that they have lost?

 

 

This. 

 

I too don't buy the implication that the delinquency rate on rental mortgages is higher therefore requiring a higher interest rate/lower max LTV. OTOH the T&Cs of residential mortgages are being breached and they are entitled to demand compensation. 

 

 

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39 minutes ago, Mike the Boilerman said:

 

 

Interestingly, one of the bellringers I was chatting with in the pub last night is an IT project manager for a large national UK mortgage lender. He was saying something exercising the board at the moment is the high level of fraud amongst their customers having residential mortgages but renting out their houses without lender permission. Renting exposes the lender to a higher commercial risk and while they agree to customers doing this if asked, they usually apply an interest rate premium to cover this higher risk.  

 

The thing is, this one lender reckons they are losing £120m a year from this type of fraud and the interesting thing is they have come up with a way to positively identify every singe case! His new project is to implement it. 

 

Point being if a lender can now do this, so can HMRC. 

 

  

What is this higher risk that the lender is 'exposed' to? The mortgagor is responsible for insuring the premises so even if those to whom the property is sublet destroy the place, it is the mortgagor who is responsible for the insurance claim. Unlike in the US where it is possible to just hand the keys back to the mortgagee if for some reason you cannot maintain your payments and your liaibility ends, here in the UK if there are costs involved in evicting your illicit tenants, the mortgagee can come after to former home owner to recover their costs. In my obviously jaundiced view, this just seems like another scam to separate the mortgagor from even more of their cash since, as you say they will agree to customers doing this if asked (and obviously you give them a bung). 

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as long as your landlord allows it, its not an issue. Very few landlords will allow it though.

The income from airbnb is part of your total income, and you will have to pay tax on your total income(from all sources). I dont think hmrc is going to go after you but airbnb payment can be tracked easily by them if they want.

guess you already know the personal allowance is 12.5k so you don't have to pay any tax on it.

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1 minute ago, Mike the Boilerman said:

 

This. 

 

I too don't buy the implication that the delinquency rate on rental mortgages is higher therefore requiring a higher interest rate/lower max LTV. OTOH the T&Cs of residential mortgages are being breached and they are entitled to demand compensation. 

Yes.... but, unless the penalties are both, included in the contract, and not unfair, one could guess that the compensation would be based upon any loss incurred. In cases where the payments are not in arrears, there is no actual loss.

 

It's a while since I read all of the terms of a mortgage contract, and I cant recall whether penalties for such a breach tend to be express, or not.

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3 minutes ago, Mike the Boilerman said:

 

This. 

 

I too don't buy the implication that the delinquency rate on rental mortgages is higher therefore requiring a higher interest rate/lower max LTV. OTOH the T&Cs of residential mortgages are being breached and they are entitled to demand compensation. 

 

 

Is this a bit like CRT renting out Winter Moorings (allowing you to overstay the 14 day limit provided you 'compensate' them for breaching the requirement)?:rolleyes:

  • Greenie 1

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1 minute ago, Richard10002 said:

Yes.... but, unless the penalties are both, included in the contract, and not unfair, one could guess that the compensation would be based upon any loss incurred. In cases where the payments are not in arrears, there is no actual loss.

 

 

On reflection ISTR him mentioning an obligation on the lender to treat customers fairly come to think about it. Something about charging more to borrowers who ask for permission to rent whilst taking no action against borrowers who keep quiet and say nothing was classed as 'unfair', an perhaps exposing the lender to some sort of sanction from the regulator.

 

 

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3 minutes ago, Wanderer Vagabond said:

What is this higher risk that the lender is 'exposed' to? The mortgagor is responsible for insuring the premises so even if those to whom the property is sublet destroy the place, it is the mortgagor who is responsible for the insurance claim. Unlike in the US where it is possible to just hand the keys back to the mortgagee if for some reason you cannot maintain your payments and your liaibility ends, here in the UK if there are costs involved in evicting your illicit tenants, the mortgagee can come after to former home owner to recover their costs. In my obviously jaundiced view, this just seems like another scam to separate the mortgagor from even more of their cash since, as you say they will agree to customers doing this if asked (and obviously you give them a bung). 

In fact, at times when a borrower might be finding it difficult to repay the mortgage each month, renting out the mortgaged property and finding somewhere less expensive to live, (parents for little/nothing, or a rental property with a much lower rent than the mortgage or, something else), can actually be a good solution all round, and less risky/costly for the lender.

 

If, by asking permission, a couple of percent is added to the interest rate, the solution may no longer be a solution.

 

Given that it is a contract, thus subject to civil law, rather than there being any/much risk of a criminal offence, most people wont tell their lender and, as long as the monthly payment is made, the chances of the lender taking steps to find out are slim..... except that MtB suggests that they are getting wise :) or :( 

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1 minute ago, Richard10002 said:

the chances of the lender taking steps to find out are slim..... except that MtB suggests that they are getting wise :) or :( 

 

Well yes that is it exactly. This was the tack of the conversation. He had only just heard advance news of this new project and he was speculating on this and actually asking ME how on earth his employer could know or discover, whilst at the same time being pleased at all the new work his dept is getting implementing it!

 

 

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No panic, guys, just thinking aloud. Thing is the last lady I stayed with has just started renting out her room, and I wondered if she realised all these implications. I would not like her to get in to trouble, but neither do I want to worry her,. unnecessarily. 

She was asking me for some advice, but to be honest, I did not think too much about it at the time, but she seems to be fairly busy, even though there is only one room 

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On 18/10/2019 at 00:20, LadyG said:

No panic, guys, just thinking aloud. Thing is the last lady I stayed with has just started renting out her room, and I wondered if she realised all these implications. I would not like her to get in to trouble, but neither do I want to worry her,. unnecessarily. 

She was asking me for some advice, but to be honest, I did not think too much about it at the time, but she seems to be fairly busy, even though there is only one room 

you are allowed to rent out part of your house under govt's rent a room scheme and get upto £7500 tax free income.

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

Edited by restlessnomad

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