Holiday homeowners in Cornwall could face an HMRC tax probe if they've been found to have not paid tax on earnings.

It comes as the popular rentals site Airbnb has been forced to share all of its users' income details with HM Revenue and Customs (HMRC) to help identify people who might owe tax. It is believed that the information handed over by Airbnb covers earnings as far back as the 2017/18 tax year.

People renting properties on Airbnb can earn up to £1,000 a year before being charged tax on their earnings, with any profits over this requiring declaration to HMRC.

In the event that HMRC obtains evidence that a holiday home owner has not paid tax in a previous year, they can open an investigation and request information going back up to 20 years ago, known as "discovery laws".

Penalties issued by HMRC are based on if they believe it to be an innocent or deliberate omission; meaning if it is believed to be an innocent error, there may be no penalty at all while for a deliberate error, the penalty incurred could be 30% of the tax owed.

An HMRC spokesperson said: “This is routine activity – each year we send out thousands of reminder letters on various areas of tax.

“We believe our customers want to pay the right amount of tax and by working with online rental platforms, as well as issuing these reminders, we’re taking steps to help make it as easy as possible for people to get their tax right.”

An Airbnb spokesperson said: “Hosts want to pay their fair share of tax and we want to help, which is why Airbnb partners with industry experts across the UK to help hosts understand and follow tax rules.

“We also work with HMRC to share information and help ensure that UK authorities receive the taxes they are due, in accordance with UK laws. The typical UK Host shares their own home for just two nights a month, and one in three say the extra income helps them afford rising living costs.”