Council asks for tax data in crackdown on illegal Airbnbs

Jacob Grattage, Reporter, Business & Accountancy Daily. Croner.

Westminster City Council requests access to HMRC data in bid to stamp out illegal Airbnb council house lets.

With an estimated 5,800 council houses in England suspected of being illegally sublet on short-term rental websites such as Airbnb or Booking.com, Westminster City Council in London is calling on the government to give councils access to HMRC data to help identify tenants illegally renting out properties.

Councillor Paul Swaddle, leader of the central London council, has written to work & pensions minister Pat McFadden, asking the government to speed up plans for a proposed data-sharing agreement between HMRC and the National Fraud Initiative (NFI), a government programme that uses data matching across the public sector to detect fraud and error.

Swaddle stated: ‘Westminster City Council understands that the NFI is currently engaged in discussions with HMRC regarding a data-sharing agreement… Once in place, this would enable Westminster Council to seek access to the HMRC data provided through the NFI to support the detection of fraudulent activity.’

The letter argued that access to HMRC data would help councils match property and income records, identifying short-term lets generating rental income and supporting fraud and planning enforcement investigations.

HMRC has since indicated it is open to sharing information where there is a clear legal basis.

An HMRC spokesperson told Business & Accountancy Daily: ‘We recognise the value that our information can provide to public bodies to improve services and tackle fraud.

‘We’re open to data sharing with other authorities where there’s a clear legal basis, supported by robust safeguards and compliance with data protection requirements’.

The move follows Westminster City Council's decision in July to join a separate government data-sharing initiative with Airbnb aimed at tackling social housing fraud.

The programme allows councils to match housing records against Airbnb listings, with early results identifying 470 potential cases of fraud across the country.

One example from a successful trial of the system in 2024 led to the identification of a social housing tenant who illegally let out their council flat in Soho for over a year on Airbnb, while living in France.

They were caught and fined £12,890, based on their Airbnb income, with the property returned to Westminster City Council.

Lisa Marçais, general manager at Airbnb, said: ‘Social housing fraud has no place on Airbnb. We're proud to have driven the first ever data-sharing agreement of this kind in partnership with the Cabinet Office and local authorities across the country, but to truly tackle this problem we need the entire short term rental industry to follow suit and participate in this initiative.

‘We remain committed to swiftly removing confirmed fraudulent listings and have a clear, established process for councils to flag issues with properties listed on Airbnb’.