Legislation to address the potential misuse of the home-sharing sector is a welcome step in the right direction but will only be effective with robust enforcement of the law, according the UKHospitality.
The Government has proposed legislation to tackle misuse of the home-sharing economy, including introduction of a new shared-occupancy test.
UKHospitality Chief Executive Kate Nicholls said:
“Steps to begin to enforce tax rules on the home-sharing economy and tackle rogue landlords and companies exploiting the system are welcome. A new clause that specifies that the homeowner must be present for at least part of the time that the property is being let to benefit from relief, can go some way to tackling misuse of the sector.
“We are, however, concerned that the Government will be effectively powerless to enforce any new rules that it tries to apply without registration of properties being let and transparency regarding the data. The problem at present is not so much the lack of any rules, it is more the ability to enforce them with any degree of success.
“There is no mechanism to determine which individuals are taking advantage of the relief unless they are making a tax declaration and no authority to check whether they would have been present at the time of the letting.
“If the Government is determined, as we hope it is, to tackle misuse of the home-sharing sector, then it needs to reassess how it enforces the legislation it puts into place. This should be the first step in an overhaul of how Government taxes and regulates this emerging sector.”