UK Airbnb Hosting Rules You Must Know: Licences, Taxes & Compliance for 2025

Understanding the Legal Landscape

If you’re planning to host on Airbnb or already managing short-term lets across the UK, compliance is no longer optional — it’s essential. Local councils and HMRC are now tightening regulations around short-term rentals to protect housing supply, ensure safety, and enforce fair taxation.

In 2025, the government is rolling out more structured rules for short-term lets, especially in high-demand cities like London, Manchester, and Edinburgh. This means every host and management company must understand licensing, tax, safety, and local restrictions to operate legally and profitably.

This guide breaks down everything UK hosts and property managers need to know to stay compliant, avoid penalties, and protect their income.

Step 1: Licensing and Planning Permission

1. The 90-Day Rule in London

If your property is in Greater London, the law limits you to renting it out for a maximum of 90 nights per calendar year on platforms like Airbnb, Booking.com, or Vrbo — unless you have official planning permission for short-term use.

Failing to comply can result in fines of up to £20,000 per breach. Most professional hosts use management companies like TOMC to monitor and rotate bookings across multiple platforms to ensure compliance while maximising occupancy.

2. Local Council Licensing Outside London

In cities such as Edinburgh, Manchester, and Glasgow, councils have introduced or are piloting Short-Term Let Licensing Schemes. These require:

• Application for a short-term let licence

• Proof of building safety and fire compliance

• Consent from landlords or freeholders (for leasehold properties)

• Evidence of proper waste management

In England, local licensing rules are patchy but expanding. Areas such as Brighton, Bristol, and York are pushing for stricter registration systems. By 2026, a national registration scheme for short-term lets is expected.

If you manage multiple units, TOMC can help track and maintain compliance across councils, ensuring every property remains fully licenced.

Step 2: Fire, Health, and Safety Requirements

Before listing your property, it’s a legal obligation to ensure it meets the Health and Safety at Work Act 1974 and Fire Safety Order 2005. The key points include:

• Smoke and carbon monoxide alarms in all living and sleeping areas

• Fire blankets and extinguishers in kitchens

• Clearly marked fire exits and evacuation instructions

• Electrical safety checks (EICR) every five years

• Gas safety certificates renewed annually

• PAT testing for portable appliances

Guests expect a professional standard of safety. TOMC ensures every property we manage is fully safety-checked, documented, and compliant before being marketed.

Step 3: Understanding Your Tax Responsibilities

1. Declaring Airbnb Income

All Airbnb or short-term rental income in the UK must be declared to HMRC. Even if you only rent occasionally, you’re legally required to report it on your Self Assessment tax return.

2. Rent-a-Room Scheme

If you’re renting a room in your main home, you can earn up to £7,500 per year tax-free under the Rent-a-Room Scheme. This doesn’t apply if you rent out an entire property.

3. Trading Income Allowance

If your total short-term rental income is under £1,000 per tax year, you may qualify for the Trading Allowance, allowing you to earn that amount tax-free.

4. Business vs. Investment Income

If Airbnb hosting forms a substantial part of your income, HMRC may treat it as a business, not a hobby. That means you can claim allowable expenses such as:

• Management and cleaning fees

• Utilities and broadband

• Mortgage interest (partial)

• Maintenance and supplies

TOMC provides detailed income reports, helping landlords stay compliant and organised when filing taxes.

Step 4: Insurance and Liability

Regular landlord insurance typically doesn’t cover short-term letting. To protect your property and guests, you’ll need specialist short-let insurance, which covers:

• Accidental and malicious damage

• Guest injury or liability claims

• Loss of income from cancellations

• Contents protection

TOMC’s partner network includes UK insurers that specialise in short-term accommodation policies, ensuring landlords are fully covered before hosting begins.

Step 5: Leasehold and Mortgage Restrictions

Many leasehold agreements and mortgage contracts in the UK restrict or prohibit short-term letting. Before listing your property, check:

• Your leasehold terms for clauses against subletting or “holiday use.”

• Your mortgage agreement for conditions that specify “owner-occupier” or “buy-to-let” restrictions.

Violating these clauses can lead to legal disputes or the loss of your mortgage terms. TOMC’s team reviews property documentation during onboarding to identify any risks before launching listings.

Step 6: Council Tax and Business Rates

Whether you pay Council Tax or Business Rates depends on how your property is used.

• If you rent your property short-term for less than 140 days per year, it typically stays under Council Tax.

• If you rent it out for more than 140 days, or if the property is available year-round for guests, it may switch to Business Rates.

You may also qualify for Small Business Rate Relief, reducing or eliminating your rates bill entirely — something many hosts overlook. TOMC assists landlords in determining which classification applies and helps manage the transition smoothly.

Step 7: Data and Privacy Compliance

Hosts must comply with the UK GDPR (General Data Protection Regulation) when handling guest information. That means:

• Storing guest data securely

• Not sharing details with third parties unnecessarily

• Informing guests about how their data is used

TOMC handles all guest communication and data securely through integrated systems, ensuring compliance with UK privacy laws and platform policies.

Step 8: White-Label Management and Compliance for Companies

For property management companies, maintaining compliance across multiple listings can be complex. TOMC’s white-label service ensures that partner companies:

• Stay compliant with local licensing and tax rules

• Benefit from our centralised safety checklists and compliance templates

• Operate under their own brand, while TOMC handles the regulatory heavy lifting

This allows smaller or growing management firms to expand faster without risking non-compliance fines or legal challenges.

Step 9: What’s Coming in 2026

The UK Government has confirmed its plan for a National Short-Term Let Registration Scheme to launch in 2026. It will require every host to:

• Register their property with a government database

• Display their registration number on listings

• Meet consistent safety and insurance standards

Scotland’s version of this scheme is already live, and England is next. Hosts who prepare early by maintaining records, inspections, and compliance documents will have no disruption once registration becomes mandatory.

TOMC’s system is designed to automatically integrate with the national register when it goes live, ensuring all client properties stay compliant from day one.

Step 10: The Advantage of Professional Management

Running a compliant, high-performing Airbnb business in the UK requires more than just good hospitality. It involves continuous attention to regulation, safety, taxation, and guest care.

TOMC’s full-service management ensures every property meets UK compliance standards while still generating above-average returns. From fire safety to financial transparency, we handle it all — allowing hosts and management partners to focus purely on growth.

Summary

In 2025, the UK short-term rental market is evolving from a casual hosting environment into a professionalised, regulated sector.

To succeed, hosts and management companies must understand:

• Licensing and 90-day rules

• Fire and safety requirements

• Tax and income reporting obligations

• Insurance and liability coverage

• Upcoming national registration changes

Failing to comply can lead to serious fines, delisted properties, or loss of income. But for those who manage it properly — or partner with the right team — it’s an incredible opportunity.

The Online Management Company provides hands-off, compliant management for Airbnb hosts and white-label support for property management firms. With our systems, your listings stay profitable, protected, and fully within UK law.