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| Hospitality Today | Feb/Mar 14
Richard Solomons echoes the “unlevel
playing-field” argument, believing that
Government and regulators show “naivety”
about online businesses, and that they
should treat internet players in “exactly
the same way” as traditional companies.
“Traditional hotel businesses, which are often
far bigger employers than internet ventures,
are currently at a disadvantage” he said,
singling out Airbnb as one example where
online firms were subject to different rules.
Airbnb was “an interesting concept”, he
said. “But what about fire and life safety,
what about food safety, what about security
issues, what about cleanliness – all those
things that we [hoteliers] are required to
keep to a standard? What about paying tax?
“If you are paying somebody for a service
and that service is sold as a major operation,
it’s becoming a big business then why would
different standards apply?
“Governance and regulation needs to treat
online businesses the same way as existing
businesses so that existing businesses are
not put at a disadvantage.”
A spokesman for Airbnb said: “The vast
majority of Airbnb hosts are regular people
who occasionally rent out only the home in
which they live. They receive tax forms and
we remind them of their obligations to review
local laws and regulations.
“In studies across the United States and
Europe it’s been demonstrated that Airbnb
brings tourists to areas of cities not well
catered for by hotels.”
In the UK, the Chief Fire Officers
Association (CFOA), have added the
regulation of accommodation sharing
websites to the agenda of their next
meeting – but Airbnb are so far winning
the battle for the ear of regulators, as they
have visited 10 Downing Street “twice in
the past two months” to discuss policy.
Mr Chesky praised the Government’s
approach to start-ups: “a lot of people see
this as an opportunity for new economic
development for the UK”.
A Taxing Question
The silicon valley culture of a “new
economic model” online, way above and
outside mundane historic dividing lines
such as national borders or tax jurisdictions
has meant that tax is a tricky issue for
them. The way most internet ventures are
structured seems designed to leave taxes
to others. As Brad Tuttle put it in Time
Magazine last June:
“There’s the problem of taxes. Namely, it seems
as if almost no one involved in the sharing
economy knows exactly what taxes they’re
supposed to pay, nor when or how to pay them.
And for several reasons - the rules are unclear,
enforcement is almost nonexistent, and many
feel that “sharing” shouldn’t be taxed at all –
very few people pay them. How many Airbnb
hosts actually hand over hotel taxes to the
local tax collector? No one really knows,
but it’s likely that the percentage is tiny -
perhaps even zero.”
The question of what taxes (if any) are
paid on a corporate basis by Airbnb itself
is almost equally opaque, though HT
understands no corporation tax is paid