INSUBCONTINENT EXCLUSIVE:
Image copyrightGetty ImagesHome rentals site Airbnb has warned a tax inquiry by HM Revenue - Customs could lead to legal proceedings.A note
in newly filed accounts for Airbnb UK said it had been contacted by HMRC over "tax laws or regulations impacting the company's business"
"The company is also subject to tax inquiries and proceedings concerning its operations and intra-company transactions," it added."Some of
these matters may result in litigation."The San Francisco-based company has two UK entities - Airbnb UK, which markets and supports the
business, and Airbnb Payments UK, which processes payments between Airbnb hosts and guests outside the US, China and India
said: "We follow the rules and pay all the tax we owe in the places we do business
That is true as rules apply today and will remain true for whatever rules apply in future
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
"As with many other companies, these are routine checks and we are working closely with HMRC."Airbnb plans to float next year in what is
expected to be one of the highest-profile share sales of 2020
In September, it said second-quarter global revenue reached $1bn, but did not say whether it made a profit.George Bull, senior tax partner
at accountancy firm RSM, said: "Nobody is saying that Airbnb has done anything wrong
The law is complicated, they have to decide how they are going to file their tax returns, they may do it on a basis that HMRC doesn't
like."However, the phrase 'This may result in litigation' sounds quite serious
It sounds as though Airbnb is expecting a big tussle with HMRC to get these figures across the line."He added: "The UK company has a
answer goes back to the 1920s
These basic tax rules for these companies are decades old and they really haven't kept up with the growth of the digital platforms."Both
eBay and PayPal paid extra tax in 2017 following a HMRC review
In recent months, Amazon and Facebook have come in for criticism over the size of their UK tax bills
Earlier this month, the Organisation for Economic Co-operation and Development (OECD) proposed tax changes aimed at making global firms pay
The proposals would give governments more power specifically to tax big technology firms such as Apple, Facebook and Google.HMRC declined to
comment on the case.You can listen to more on this story here on the Wake up to Money podcast
