London Council Seeks HMRC Data to Crack Down on Illegal Short‑Term Lets
Westminster City Council is pushing for access to HMRC data to spot illegal short‑term rentals that violate the 90‑day rule. The council will use the National Fraud Initiative to match tax, council and booking platform data, hoping to curb fraud and restore properties to their intended housing use.
By Felo News Desk · Published
Westminster City Council is taking a hard line against illegal short‑term lets that are undermining London’s housing market. The council’s leader, Paul Swaddle, has written to Cabinet minister Pat McFadden requesting cooperation from HM Revenue & Customs (HMRC) to access tax data that could reveal homeowners operating covert Airbnb‑style rentals.
Why the crackdown matters
London’s property market has long been strained by a surge in short‑term lets. While many homeowners legitimately rent out spare rooms or entire homes, a significant number are suspected of breaching the 90‑day limit set by the city’s short‑term letting regulations. These illegal operations not only deprive the city of tax revenue but also reduce the supply of long‑term housing for residents, particularly in the capital’s central boroughs.
The role of the National Fraud Initiative
Swaddle highlighted that the council is working with the National Fraud Initiative (NFI), a public‑private partnership that shares data to detect fraud. The NFI is currently negotiating a data‑sharing agreement with HMRC that would allow Westminster to tap into the tax information provided through the initiative. Once in place, the council could match addresses and income indicators from HMRC, council records and booking platforms such as Airbnb and Booking.com.
By cross‑referencing these data sets, Westminster hopes to identify properties that are being used for illegal short‑term lets, especially in social housing and council‑owned homes. The council believes that this approach will give it a “more effective chance of establishing fraud” and enable targeted enforcement actions.
Potential impact on the housing market
Westminster estimates that there are more than 13,000 short‑term rental properties within the borough. If the council can confirm which of these are operating illegally, it could take steps to restore them to their intended use as long‑term housing for individuals and families waiting for a home. This would not only increase the availability of affordable homes but also ensure that residents are not displaced by transient tenants.
In addition, the data‑sharing initiative could help the council tackle other financial crimes. By matching HMRC data with council and booking platform information, the council could identify rogue businesses that are evading business rates, selling substandard goods or otherwise breaking financial laws. This broader enforcement capability would strengthen the city’s regulatory framework.
Next steps and unresolved questions
While the council has made a formal request to the Cabinet Office, it is unclear when, or if, HMRC will grant the data‑sharing agreement. The council is also working with Airbnb to accelerate a crackdown on illegal short‑term letting in social housing. If the partnership succeeds, Westminster could set a precedent for other London boroughs to follow suit.
Key questions remain: How will the council ensure that data sharing complies with privacy laws? What penalties will be imposed on homeowners who are found to be in breach of the 90‑day rule? And how will the council balance the interests of legitimate short‑term renters with the need to protect the long‑term housing supply?
Until these issues are resolved, the crackdown will continue to evolve. Homeowners and tenants alike should stay informed about the council’s actions and the potential implications for their properties.
Key facts
- Westminster requests HMRC data to spot illegal short‑term lets
- Council uses National Fraud Initiative to cross‑match data
- 13,000+ suspected short‑term rentals in the borough
- Goal: restore properties to long‑term housing
- Unresolved issues: data privacy, enforcement penalties
Why it matters
The crackdown seeks to protect London’s housing supply and ensure that short‑term rentals comply with tax and regulatory standards, directly impacting residents and the city’s economy.
Frequently asked questions
What is the 90‑day rule?
A local regulation that limits the number of days a property can be rented out on a short‑term basis.
How will the council enforce the rule?
By matching HMRC tax data with council records and booking platform information to identify violations.
Will homeowners face fines?
The council plans to impose penalties on those found to be in breach, though specific fines have not yet been announced.
Sources
- [1] standard.co.uk — originally reported as “London homeowners face new tax crackdown on illegal Airbnb-style lets”
