Let Property Campaign: undeclared rental income, put right properly

Rental income goes unreported for ordinary reasons. A former home is let when a job moves, a flat is inherited with a tenant already in it, a spare property is let to family at a low rent, or the letting agent was assumed to be dealing with the tax. None of those changes the position: rental profit is taxable, and HMRC expects it to be returned.

The Let Property Campaign exists so that landlords in that position can come forward on defined terms. It is not an amnesty. Tax, interest and any penalty are still payable — but coming forward voluntarily is generally treated more favourably than being found.

Who can use the Let Property Campaign?

HMRC’s guidance describes the campaign as being for individual landlords with undeclared income from letting residential property, in the UK or abroad. That includes:

• a single let property, or several
• a room let in your own home, where the income is over the Rent a Room limit (£7,500 a year, or half that if the income is shared)
• holiday lets
• an inherited property that is now let
• people who live abroad, or intend to for more than six months, and let a property in the UK

It is not the route for non-residential property, such as a shop, garage or lock-up, or for a disclosure on behalf of a company or a trust. Those go through HMRC’s other disclosure routes, set out on our page on voluntary disclosures. A personal representative can use the campaign for a landlord who has died, and an adviser can notify on a client’s behalf.

Joint owners

Each person makes their own disclosure. HMRC’s guidance says a disclosure cannot include details for more than one person, so a couple who let a property together make two, each covering their own share of the profit.

Working out that share is where joint ownership gets technical. A married couple or civil partners who live together are normally taxed on equal shares of the income from property held in both their names, whatever the actual split of ownership, unless they have made a declaration of unequal shares to HMRC (form 17). That declaration counts only from the date it is made, so it cannot reach back over the years being disclosed. For other joint owners, the share follows each person’s entitlement to the profits, which often, but not always, matches their share of the property.

Why this is more visible to HMRC than it used to be

HMRC draws on a wide range of third-party information about property. Land Registry records show who owns what. HMRC has powers to require bulk information from letting agents and anyone else who manages property or collects rent for someone else. And since 1 January 2024, digital platforms through which property is let have had to collect details of the people letting through them and report them to HMRC each year; our guide to HMRC letters to online sellers and creators covers that reporting.

A landlord who has not heard from HMRC should not read that as a sign that nothing is known.

How does the Let Property Campaign work?

1. Notify. You tell HMRC, online, that you intend to make a disclosure under the campaign. No figures are needed at this stage. HMRC replies with a disclosure reference number and a payment reference number.
2. Calculate. The unreported profit is worked out for every year that needs correcting, with allowable expenses and reliefs applied correctly, followed by the tax, the interest and any penalty. Under the campaign you work out the penalty yourself; HMRC does not set it for you.
3. Disclose and offer. The disclosure includes a declaration that it is correct and complete, and a formal offer to pay everything owed. It must be submitted within 90 days of the date you receive HMRC’s acknowledgement of the notification.
4. Pay. Payment goes with the disclosure, using the payment reference. If you cannot pay in full, HMRC’s guidance says to contact its helpline before submitting the disclosure or any payment, so that terms can be agreed. Our guide to Time to Pay arrangements explains how those work.

The deadline is the reason to do the work in a different order. The figures, the years and the behaviour should be settled before HMRC is notified, so the clock is not running while the facts are still being gathered.

What goes into the disclosure?

The disclosure covers income that has never been reported to HMRC: the rent, less allowable expenses that have not already been claimed. Where records are incomplete, HMRC’s guidance asks for a best estimate, with the workings kept; bank statements are usually the starting point. A year that made a loss has no tax to disclose, and rental losses can only be carried forward against future rental profits, not set against other income.

Two years are dealt with outside the disclosure. Income from the current tax year is not included, and income from the year before it (in the 2026-27 tax year, that is 2025-26) goes on a tax return instead. HMRC’s guidance also says that any return it has issued for 2022-23 or a later year that is still outstanding should be completed, and that year left out of the disclosure.

The campaign is not limited to rent. A condition of using it is that the disclosure includes any other income or gains that were never declared, such as untaxed interest, profits from another business, or a gain on selling a property. Other matters, such as VAT or tax credits, can be flagged in the disclosure for HMRC to pass on.

How far back does a Let Property Campaign disclosure go?

The number of years depends on why the income went unreported.

The last row catches many landlords out. Someone who should have registered for Self Assessment and did not has failed to notify HMRC, and the law allows twenty years for that even where nothing was deliberate. The deadline to register is 5 October after the end of the tax year in which the letting income began. HMRC’s guidance says it expects most people to cover no more than six years, though some will need more.

For a property abroad, the offshore rules can reach further: HMRC can go back up to twelve years even where the loss was not deliberate. Our guide to how far back HMRC can investigate sets out the limits in full.

How are Let Property Campaign penalties worked out?

The penalty is a percentage of the extra tax. Which rules set the percentage depends on how the income was missed:

• If you were never in Self Assessment and should have been, the penalty is for failing to notify HMRC.
• If you were filing returns and the rent was left off or understated, the penalty is for an inaccurate return.

In both cases the range depends on the behaviour, and on whether the disclosure was unprompted: made when you had no reason to believe HMRC had discovered the problem or was about to. Within the range, the penalty is reduced for the quality of the disclosure, meaning telling HMRC, helping it work out the tax, and giving it access to records.

For a landlord disclosing several years, the older years will be in the 12-months-or-more row. Some further points from the legislation and HMRC’s campaign guidance:

• There is no penalty for an inaccurate return where reasonable care was taken, though HMRC’s guidance says it does not expect many people to fall into that category. A failure to notify that was not deliberate carries no penalty where there was a reasonable excuse and the failure was put right without unreasonable delay once the excuse ended.
• Timing counts. Where a disclosure starts more than three years after the problem began, HMRC normally restricts the reduction, so the penalty does not fall below the minimum plus 10 percentage points. For a failure to notify, this applies only where the failure was deliberate.
• For a property abroad, the offshore penalty rules apply, and the maximum can reach 200% of the tax depending on the country. Our page on the Worldwide Disclosure Facility explains how offshore penalties work.
• HMRC’s guidance warns that someone who was eligible for an earlier disclosure opportunity and did not use it may find HMRC treats the failure as deliberate, and expects the penalty and the years to be worked out on that basis.
• Because you calculate the penalty yourself, it has to be right: HMRC’s guidance says a disclosure with the wrong penalty may be rejected.

To try the onshore ranges on your own figures, use our HMRC penalty calculator. Our guide to careless and deliberate penalties explains the reductions in detail.

A worked example: illustrative figures, not a case study

We do not publish client case studies. The example below uses invented, round figures to show how the pieces fit together. It is not a real case, and the result of any real disclosure depends on its own facts.

Sam let a former flat from April 2018 to March 2024, after moving in with a partner. Sam was employed, paid tax through PAYE, was never in Self Assessment, and assumed the letting agent was dealing with the tax. There was no mortgage. After allowable expenses the profit was £5,000 a year, and Sam’s income stayed within the basic-rate band, so the tax on it was £1,000 a year.

• Behaviour. Sam never told HMRC about the income, so this is a failure to notify. Suppose it is accepted that it was not deliberate.
• Years. A failure to notify can reach back twenty years, so all six years of letting are in, 2018-19 to 2023-24: tax of £6,000. Had Sam been filing returns and carelessly left the rent off, the six-year limit for carelessness would apply instead, and the two earliest years would already be out of time.
• Penalty. The tax for every year had been unpaid for more than 12 months, so the range comes from the 12-months-or-more row of the table above.

Where the penalty lands within the range depends on the quality of the disclosure. If HMRC concluded instead that Sam had deliberately kept quiet, the unprompted range would be 20% to 70%, and because the failure began more than three years earlier HMRC would normally restrict the reduction, leaving 30% to 70%: £1,800 to £4,200.

Interest is due on top, on each year’s £1,000 from the date it should have been paid. Waiting would not shorten the list of years: for a failure to notify, the earliest year here stays open until 2039.

Is interest charged on a Let Property Campaign disclosure?

Yes. Interest runs on the tax for each year from the date it should have been paid until the date it is paid, worked out daily. Since 6 April 2025 HMRC’s late payment interest rate has been the Bank of England base rate plus 4 percentage points, so it moves when the base rate does.

Interest is not a penalty and is not reduced for a good disclosure. It has to be included: HMRC’s guidance says a disclosure without the correct interest will be rejected as incomplete. A penalty only carries interest if it is itself paid late.

What if HMRC has already written to you?

It depends on what the letter is.

• A nudge letter, saying HMRC holds information suggesting you may have rental income and inviting you to check, is not an enquiry. The campaign is usually still open, but a disclosure made after a letter about the same income is likely to be treated as prompted, which raises the bottom of the penalty range. Some letters enclose a certificate of tax position to sign; read our guide to nudge letters and the certificate of tax position before signing anything.
• A compliance check or enquiry is different. HMRC’s guidance says a campaign disclosure is unlikely to be accepted where HMRC had told you it was opening an enquiry or compliance check before you notified. The disclosure is then made to the officer running the check, and an early, full disclosure can still affect the penalty. Our page on compliance checks explains how they run.

Either way, the letter’s deadline comes first. If you are not sure which kind it is, start by identifying the letter.

What happens after the disclosure?

HMRC acknowledges the disclosure; its guidance says to call the Let Property Campaign helpline if nothing has arrived within 30 days. It may then ask for clarification or evidence, and full co-operation is a condition of using the campaign.

When HMRC is satisfied, it sends an acceptance letter. Your offer and that letter together form a legally binding contract, which is the certainty the campaign offers.

If HMRC finds a disclosure materially incorrect, its guidance says it will seek significantly higher penalties, and in exceptional circumstances an incomplete disclosure may be considered under its criminal investigation policy. If you realise something was left out, the guidance says to contact HMRC straight away to amend it. HMRC keeps receiving information after a disclosure is accepted, and can look at the position again if that information shows it was wrong.

The campaign gives no immunity from prosecution. Where the conduct may have been deliberate, HMRC’s guidance says the Contractual Disclosure Facility under Code of Practice 9 is the only route that carries an assurance against a criminal investigation; see our page on COP9. HMRC can also publish the details of someone penalised for deliberate conduct where the tax at stake exceeds £50,000, but not where the penalty received the full reduction for the quality of the disclosure. Our guide to the deliberate tax defaulters list explains how that works.

What has changed for landlords in 2025 and 2026?

The campaign expects returns to be right from the latest year disclosed onwards, and registering for Self Assessment is part of putting things right for anyone not already registered. Two recent changes matter here.

• Furnished holiday lettings. Until 5 April 2025, a holiday let that met the furnished holiday lettings conditions had its own tax rules, including on mortgage interest and capital allowances. That regime was abolished from 6 April 2025, and the income now forms part of the ordinary property business. A disclosure that spans the change may need both sets of rules, year by year. From 2025-26, spouses and civil partners who let a holiday property jointly also fall under the equal-shares rule described above.
• Making Tax Digital for Income Tax. From 6 April 2026, landlords and sole traders whose qualifying income for 2024-25 was over £50,000 must keep digital records and send HMRC quarterly updates. Qualifying income is income from property and self-employment before expenses, and for a jointly owned property only your share counts. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. HMRC works it out from Self Assessment returns, so a landlord bringing rental income back onto returns should check where that leaves them.

Where these disclosures usually go wrong

The wrong number of years

The years covered depend on the behaviour behind the omission: reasonable care, carelessness, deliberate conduct, or a failure to notify. Too few years and the disclosure is incomplete; too many and tax is paid that HMRC could not have assessed. The behaviour also sets the penalty range, so it is the single most consequential judgement in the disclosure.

Expenses and reliefs claimed wrongly

Mortgage interest on a residential let has for several years been relieved only as a basic-rate tax reduction, not as a deduction from rental profit. That restriction was phased in from 6 April 2017 and fully in place from 2020-21, so a disclosure reaching back before then mixes the two treatments. Repairs and improvements are treated differently, and replacement furnishings follow their own rules. These are the calculations most often done wrongly on a first attempt, in both directions.

Joint and inherited property

Property held jointly is taxed according to each owner’s share of the income, which for spouses and civil partners is normally half each, as explained above. Inherited property brings a different starting cost for any later sale. Both affect whose disclosure it is and what it contains.

Landlords who live abroad

The campaign is open to landlords living outside the UK. UK rental income remains taxable in the UK wherever the landlord lives, and the non-resident landlord schemeapplies alongside it: the letting agent, or in some cases the tenant, may be required to deduct basic-rate tax from the rent unless HMRC has approved it being paid gross. Deductions under that scheme count towards the tax due, but they do not replace the return. A landlord whose agent deducted tax throughout may still have years of returns outstanding. Our page for UK expats in the UAE covers the wider position.

The campaign also covers UK residents who let a property abroad. That rent is foreign income, so the longer offshore time limits and higher offshore penalties described above can apply to it.

What we do

• Establish which years are open and which behaviour applies
• Rebuild the rental accounts from what records exist, with expenses treated correctly
• Confirm whether the Let Property Campaign is the right route, or whether another applies
• Handle the notification, the disclosure and the computations
• Put the penalty position and any mitigation to HMRC deliberately
• Arrange time to pay where the amount cannot be settled at once

Further reading

• How far back can HMRC investigate?
• HMRC penalties for careless and deliberate errors
• The non-resident landlord scheme explained
• HMRC’s deliberate tax defaulters list, and how disclosure affects it
• Voluntary disclosures more generally