HMRC are continuing to use their successful Let Property Campaign to collect tax owed by residential property landlords. We explain the background to the campaign, and how we can help you to make a voluntary disclosure to HMRC.
About the Let Property Campaign
HMRC launched the Let Property Campaign in 2013 to collect unpaid or underpaid tax from landlords, estimated at up to £500m between 2009 and 2010. It enables landlords to report previously undisclosed taxes on rental income.
Who the Let Property Campaign covers
The Let Property Campaign is aimed at individual landlords renting out residential property. This includes landlords who:
- Rent out a single property
- Rent out multiple properties
- Rent out a room in their main home that’s over the Rent a Room Scheme threshold
- Have holiday lettings
- Live abroad or intend to live abroad for more than six months and rent out a property in the UK, as they may still be liable to UK taxes
It doesn’t include:
- Landlords who are letting out non-residential properties such as shops or garages
- Those wanting to disclose income on behalf of a company or a trust
HMRC appreciate that some landlords may have misunderstood the rules around declaring rental profits. Examples given by HMRC include individuals who:
- Rent out a property they’ve inherited
- Rent out a flat to cover their mortgage payments
- Have moved in with someone and need to rent out their house
- Have moved into a care home, rent out their house and use the rental profit towards care home fees
Disclosures: how the Let Property Campaign works
If you’re a residential property landlord identified by HMRC as owing tax, you may receive a nudge letter. This will ask specific questions about how you use the property and when you purchased it.
While it’s essential to take letters from HMRC seriously, you shouldn’t wait for them to write to you. As soon as you become aware that you owe tax on your letting income, you must tell HMRC of your intention to make a disclosure.
HMRC will then issue a disclosure reference number and payment disclosure number. A disclosure must be made within 90 days of the date you receive your notification acknowledgement.
The following stages involve calculating what you owe, making a formal offer of payment to HMRC and paying HMRC.
After checks, if HMRC are satisfied that you’ve made a full disclosure, they will accept it as quickly as possible. HMRC anticipate that the vast majority of disclosures will be accepted.
Why you should act now
In its first 10 years, the Let Property Campaign’s total tax yield was over £236m. More than 45% of that was from the three years leading up to 2022/23. We expect this acceleration to increase following Autumn Budget 2024, which committed to additional HMRC resources for enquiries and debt enforcement.
The voluntary disclosures made during the Let Property Campaign’s first decade represent only around 5% of the landlords originally targeted. Many smaller landlords, who haven’t yet been targeted but have undisclosed income, may find themselves contacted by HMRC as part of the campaign.
Extensive sources of rental market data – such as the Land Registry, letting agents, stamp duty land tax records and tenancy deposit schemes –enable HMRC to identify a large number of landlords with unpaid taxes.
From April 2026, as part of its modernisation of the UK tax system, the Government plans to introduce Making Tax Digital (MTD) for landlords with qualifying income over £50,000. A year later, this will be extended to landlords with qualifying income over £30,000. Landlords covered by MTD for Income Tax will need to send HMRC quarterly summaries and two annual filings. We have more details here. This MTD timetable means that 2025 is the ideal opportunity for landlords to make a disclosure under the Let Property Campaign and ensure their tax affairs are up to date.
Making a voluntary disclosure to HMRC is the most effective way to do this. A well prepared and appropriately placed disclosure can alleviate a great amount of stress and effort.
How we can help
Our tax risk & dispute resolution team are highly experienced in dealing with HMRC on behalf of individuals, families and businesses. By disclosing any problems to HMRC before they identify the issue themselves, our tax dispute & resolution specialists can manage how HMRC view the matter, as well as mitigating any penalties that HMRC may seek to charge.
To help landlords with the transition to Making Tax Digital, BKL have partnered with Hammock, specialists in software for landlords. Our tax experts can explain how MTD for Income Tax is expected to work for landlords, helping you to prepare and keep costs down.
With a leading UK provider, Vantage, we also offer a tax fee protection service. It can cover the costs of our professional fees in liaising with HMRC and has brought many clients peace of mind – and, for those clients who have been subject to an HMRC enquiry, considerable savings.
Contact us today for a confidential discussion about the Let Property Campaign, voluntary disclosures to HMRC and your tax liability as a residential property landlord.