Tax & admin · 16 March 2016

The Budget 2016: Osborne’s “Airbnb allowance” empowers a new breed of micro entrepreneurs

The Budget saw a series of measures designed to benefit small business

Britain’s community of “micro entrepreneurs” who use Airbnb to rent out their homes will benefit from a new tax-free allowance worth £1,000 a year.

George Osborne introduced the “Airbnb allowance” in 2016’s Budget announcement on 16 March, outlining that individuals who sell services or rent property online will no longer have to pay any taxes or fill in any forms on the first £1,000 of income made from those services.

“The rapid growth of the digital and sharing economy means it is becoming easier for more and more people to become micro entrepreneurs,” the chancellor said in his address to parliament.

“It’s a tax break for the digital age and at least half a million people will benefit,” he added.

Already re-branded by some as the “spare room subsidy”, the digital tax break could also see savings made by those individuals making money from selling items online via sites like eBay. However, it is as yet unclear whether it will apply to other companies in the “sharing economy”, such as Uber.

In a statement, Silicon Valley-based Airbnb said: “This is good news for the growing number of Airbnb hosts in the UK who are sharing their homes, earning a little extra money to pay the bills and bringing new economic benefits to their communities.”

In a Budget largely geared towards improving conditions for the UK’s small firms, the chancellor will be hoping to have raised his 9 per cent approval rating amongst small and medium-sized business owners prior to 16 March.

Commenting on the Budget, MarketInvoice co-founder and CEO Anil Stocker said: “The chancellor has finally put small businesses at the heart of his economic plan. For a long time, small business owners have felt ignored in favour of the world’s largest multinationals. Today he began to redress the imbalance.

“Cutting taxes on small business by stopping the sweetheart tax deals for large multi-nationals in the number one thing owners wanted to see from today’s Budget, and the chancellor has delivered,” Stocker continued to say.

“Small businesses make up 99 per cent of all businesses and helping firms grow should be the cornerstone of any economic plan. The only surprise is that it’s taken so long for the government to take meaningful action.”

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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