British landlords with holiday rentals located in countries within the European Union may soon be required to pay VAT on rental income. 

The rules will impact landlords who let property in the EU via digital platforms such as Airbnb and other online services.

Tax Assist Accountants say this will have “a substantial effect” on landlords based in this country but operating premises in the EU.

From 2025, any landlords who let holiday accommodation within the EU will need to pay an average of 20 per cent VAT regardless of whether the landlord is residing in the same country or outside the EU. 

The EU estimates that 70 per cent of accommodation providers using on-demand platforms like Airbnb and Booking.com are not VAT registered. They will need to notify which providers are VAT-registered and those who don’t yet have VAT numbers to each applicable member state. This also includes firms that act as local agents for landlords in EU countries.

Tax Assist Accountants says that as the UK left the EU in January 2020, this will not directly impact landlords of accommodation in this country although the company warns that it is possible that HM Treasury may monitor the success of the EU’s VAT in the Digital