Let Property Campaign: How Landlords Can Disclose Undeclared Rental Income to HMRC

If you have received rental income from residential property but have not told HMRC about all of it, the Let Property Campaign gives individual landlords an opportunity to bring their tax affairs up to date. The campaign covers undisclosed rental income from residential property in the UK or abroad and allows landlords to make a voluntary disclosure of tax, interest and applicable penalties.

This guide explains what the Let Property Campaign is, who can use it, how the Let Property Campaign disclosure works, how to calculate the tax and interest owed, how penalties are determined, what happens after you notify HMRC and what you need to do to remain compliant in the future.

The campaign is particularly relevant if you have never declared rental income, have only declared some of your property income, misunderstood the tax rules, inherited a property and started renting it out, lived overseas while receiving UK rental income, or have discovered historic errors in previous tax returns.

What Is the Let Property Campaign?

The Let Property Campaign is an HMRC disclosure opportunity for individual landlords who have unpaid tax arising from residential property letting.

It allows eligible landlords to voluntarily tell HMRC about previously undisclosed rental income and settle the tax, interest and penalties that arise.

The campaign can apply to residential property landlords with properties in the UK or overseas. HMRC specifically states that it can cover landlords with a single property or multiple properties, certain landlords renting out rooms, holiday lettings and people living abroad who remain liable to UK tax on UK property income.

The important point is that the campaign is not a way to avoid tax. It is a formal process for correcting previously undisclosed tax liabilities with HMRC.

Who Can Use the Let Property Campaign?

The campaign is primarily intended for individual landlords who have undisclosed tax liabilities from residential property income.

You may be able to use the campaign if you:

• Own and rent out one residential property.
• Own and rent out several residential properties.
• Have previously failed to declare rental income on a Self Assessment tax return.
• Have declared some rental income but omitted additional property income.
• Rent out a property while living overseas.
• Inherited a property and subsequently rented it out without correctly declaring the income.
• Rent out a room in your main home and your income exceeds the relevant Rent a Room Scheme threshold.
• Operate certain holiday lettings where there is undisclosed tax to report.

HMRC confirms that the campaign is available to individual landlords with previously undisclosed tax on residential property income.

Can overseas landlords use the Let Property Campaign?

Yes. Living outside the UK does not automatically remove a landlord from UK tax obligations.

If you live abroad and receive rental income from UK property, you may still have UK tax liabilities. HMRC specifically includes landlords who live abroad, or intend to live abroad for more than six months, within the scope of the campaign where they have undisclosed UK property income.

The tax position of an overseas landlord can be more complicated because residence, property income, double taxation agreements and the Non-Resident Landlord Scheme may need to be considered separately.

Who Cannot Use the Let Property Campaign?

The campaign is not available for every type of property or taxpayer.

HMRC states that the campaign does not cover:

• Landlords letting non-residential properties such as shops, garages or lock-ups.
• Disclosures made on behalf of a company.
• Disclosures made on behalf of a trust.

If your circumstances fall outside the campaign, this does not necessarily mean that you cannot make a voluntary disclosure to HMRC. Another disclosure route may be appropriate depending on your circumstances.

What Counts as Undeclared Rental Income?

Undeclared rental income is not limited to someone who has deliberately hidden an entire property from HMRC.

You may have an issue if you:

• Never registered for Self Assessment when you were required to.
• Failed to tell HMRC about a rental property.
• Declared one rental property but omitted another.
• Understated rental income on previous tax returns.
• Claimed expenses that were not allowable.
• Used incorrect property finance cost treatment.
• Failed to report rental income from a property inherited from a family member.
• Failed to report UK rental income while living abroad.
• Misunderstood whether your rental activity was taxable.

The reason for the mistake does not necessarily prevent you from making a disclosure. HMRC says landlords should notify it when they become aware that they owe tax on letting income, whether the error arose from misunderstanding the rules or deliberate non-compliance.

Why Should You Make a Let Property Campaign Disclosure?

If you know that you have unpaid tax from rental income, voluntarily approaching HMRC is generally preferable to waiting for HMRC to identify the problem through its own compliance activity.

A voluntary disclosure allows you to calculate the outstanding liability, explain the circumstances and make a formal offer to HMRC.

HMRC states that penalties will usually be lower where a taxpayer makes a voluntary disclosure. However, the amount of any penalty depends on the circumstances, including the behaviour that caused the error and the quality and timing of the disclosure.

Ignoring an undisclosed liability can also expose you to higher penalties and, in appropriate cases, criminal prosecution.

How Does the Let Property Campaign Work?

There are three broad stages to the process:

1. Notify HMRC that you intend to make a disclosure.
2. Prepare and submit the disclosure, including the tax, interest and applicable penalties.
3. Make a formal offer and pay the amount due, or arrange payment with HMRC if you cannot pay the full amount by the deadline.

HMRC’s current guidance states that you must notify HMRC as soon as you become aware that you owe tax on your letting income. After receiving the notification acknowledgement, you generally have 90 days to make the disclosure and payment.

Step 1: Notify HMRC About Your Disclosure

The first stage of the Let Property Campaign disclosure is telling HMRC that you intend to disclose previously unpaid tax.

At this point, you do not need to provide all the detailed calculations of the rental income and tax you owe.

HMRC will issue a unique disclosure reference number and a payment reference number. You should retain these because they will be needed when dealing with HMRC about the disclosure and making payment.

Does each landlord need a separate notification?

Yes. HMRC requires a separate notification for each person making a disclosure.

For example, if a husband and wife jointly own a rental property and both have undisclosed income, they cannot simply make one disclosure covering both individuals. Each person’s share needs to be dealt with separately.

Step 2: Gather Your Property Records

Once you have notified HMRC, you need to calculate the tax position accurately.

Do not start with the penalty calculation. First establish the property income and allowable expenses for each relevant year.

Information you may need

• Annual rental statements.
• Tenancy agreements.
• Bank statements.
• Letting agent statements.
• Mortgage interest information.
• Repair and maintenance invoices.
• Insurance costs.
• Ground rent and service charge records.
• Professional fees.
• Council tax and utility records where relevant.
• Records of capital expenditure.
• Previous Self Assessment tax returns.
• Evidence of tax already paid.

HMRC recommends gathering information and records as early as possible during the 90-day disclosure period.

Step 3: Calculate Your Undeclared Rental Profit

The amount you owe is not simply a percentage of the rent you received.

You first need to establish the taxable property profit for each relevant year by considering the rental income and allowable expenses under the property income rules.

In general terms:

Rental income − allowable property expenses = property profit

However, property tax calculations can involve additional rules, including restrictions on finance costs, capital expenditure, replacement domestic items and losses.

HMRC’s property income guidance explains how landlords should calculate rental profits and determine which expenses are allowable.

Do I include income I already declared?

No. Your disclosure should address income that was not previously disclosed.

HMRC explains that income already reported, for example on an earlier tax return, should not be included again as undisclosed income.

However, when calculating the additional tax caused by the omitted income, you need to consider the full income position for the relevant year because the additional property income can affect the rate of tax that applies.

How Far Back Can a Let Property Campaign Disclosure Go?

The number of years that need to be reviewed depends on the circumstances of the taxpayer and the nature of the non-compliance.

Do not assume that you only need to correct the most recent tax year.

HMRC’s current disclosure guidance provides for disclosures covering historic liabilities, and its penalties and interest calculator can assist with calculations covering up to the previous 20 years. The appropriate period for your actual disclosure depends on the facts and the applicable tax rules.

This is one of the areas where professional review can be particularly important. A disclosure covering several years needs to be complete and consistent rather than simply being based on an estimate of recent rental income.

Let Property Campaign Calculator: How Does It Work?

HMRC provides a calculator that can help individuals calculate interest and penalties associated with a voluntary disclosure.

It is important to understand what the calculator does and does not do.

The HMRC calculator can assist with interest and penalty calculations, but you still need to calculate the underlying Income Tax liability for each relevant year. HMRC specifically warns that the calculator requires details of all income for the relevant year, not merely the additional income being disclosed, so that the additional tax can be calculated at the correct rate.

What should you calculate before using the calculator?

1. Identify each tax year affected.
2. Calculate the rental income for each year.
3. Identify allowable property expenses.
4. Calculate the taxable property profit or loss.
5. Consider other income for each relevant year.
6. Calculate the additional Income Tax due.
7. Calculate statutory interest.
8. Determine the appropriate penalty.
9. Check that the final disclosure is complete.

HMRC also warns that rental profits should not be entered as self-employment profits in the calculator because doing so can incorrectly generate a Class 4 National Insurance charge.

Let Property Campaign Penalties: How Much Could You Pay?

Let Property Campaign penalties are calculated separately from the tax and interest you owe.

The penalty depends on factors including the reason for the non-compliance, whether the behaviour was careless or deliberate, whether the income or gain is UK or offshore, and the quality of your disclosure.

HMRC’s current guidance states that penalties can be up to:

• 100% of the tax liability for a UK liability.
• 200% of the tax liability for an offshore liability.

These are maximum figures. The actual penalty can be substantially lower depending on the circumstances and the reductions available for disclosure.

Can the penalty be 0%?

Potentially, yes.

HMRC states that where a taxpayer has taken reasonable care with their tax affairs but has nevertheless failed to declare the correct amount of tax, a penalty may not be charged.

However, HMRC also states that it does not expect many circumstances to fall within this category. Whether a penalty is due depends on the facts of the individual case.

You should therefore not assume that a penalty will automatically be 0% simply because the disclosure is voluntary.

Does a voluntary disclosure reduce the penalty?

Voluntary disclosure can result in a lower penalty because the disclosure process takes account of factors such as cooperation, telling HMRC about the problem and helping HMRC establish the correct liability.

HMRC states that penalties will usually be lower where a taxpayer makes a voluntary disclosure. However, the reduction depends on the circumstances and the completeness and quality of the disclosure.

What if I have been non-compliant for several years?

The length of time you have been non-compliant can affect the penalty reduction.

HMRC states that where a taxpayer has taken a significant period to correct non-compliance, it may not agree the full available reductions. HMRC normally considers a significant period to be more than three years, although a shorter period can be relevant where the disclosure covers a longer period.

Do You Pay Interest as Well as the Penalty?

Yes.

Interest is separate from the penalty and is charged on the late-paid tax from the date the tax was originally due until the date it is paid.

HMRC calculates interest on a daily basis. If the interest included in your disclosure is incorrect, HMRC may reject the disclosure because the amount offered is incomplete.

Your total settlement can therefore consist of:

• Additional Income Tax.
• Late-payment interest.
• Any applicable penalty.

What Happens If You Cannot Pay the Full Amount?

You should not simply ignore the 90-day deadline because you do not have enough cash to settle the liability.

HMRC states that if you cannot pay what you owe by the deadline shown on your notification acknowledgement, you must make payment arrangements with HMRC by that date.

If you fail to make the required disclosure and payment arrangements by the deadline, you may lose the certainty provided by the campaign’s terms and conditions.

This means a landlord who cannot afford to pay the entire amount immediately should deal with HMRC before the deadline rather than allowing the deadline to pass.

What Is the Let Property Campaign Disclosure Form?

The Let Property Campaign disclosure form is used to provide HMRC with the information needed to settle the previously undisclosed tax liabilities.

The disclosure needs to be complete and accurate. It is not simply a statement saying that rental income was omitted.

Depending on your circumstances, you may need to provide information covering:

• The tax years affected.
• Rental income that was not previously declared.
• Allowable property expenses.
• Additional tax due.
• Interest.
• Penalty calculations.
• Other previously undisclosed liabilities that need to be included.

HMRC states that participation in the campaign requires the taxpayer to include all previously undisclosed income covered by the disclosure, not merely selected rental receipts.

Do You Have to Disclose Other Undeclared Income?

This is an important part of the campaign that landlords sometimes overlook.

If you are making a Let Property Campaign disclosure, HMRC states that you must include other previously undisclosed income and liabilities that fall within the disclosure requirements.

This can include matters such as:

• Undeclared employment or business income.
• Undeclared investment income.
• Non-residential property or land rental income.
• Capital gains.

The disclosure process also allows you to indicate that there may be other matters requiring attention, including certain VAT, employer tax, Inheritance Tax, trust or residency issues. HMRC can then refer those matters to the appropriate department.

This is why a landlord should not treat the campaign as simply a calculation of missing rent. The complete tax position needs to be reviewed.

What If You Deliberately Did Not Declare the Rental Income?

You can still make a voluntary disclosure.

The fact that the omission was deliberate does not mean that you should wait for HMRC to discover it.

However, deliberate behaviour can affect the penalty. The penalty calculation needs to reflect the underlying behaviour and the quality of the disclosure.

HMRC’s guidance makes clear that the penalty is the responsibility of the person making the disclosure to calculate as part of the process, although HMRC can review the calculation and reject a disclosure if it considers that the penalty is incorrect.

What If HMRC Has Already Contacted You?

The Let Property Campaign is designed for voluntary disclosures. If HMRC has already opened an enquiry or compliance check into your tax affairs, you should not assume that the campaign provides the appropriate route for resolving the matter.

You should establish what HMRC is asking for and whether the disclosure route remains available in your circumstances.

Do not submit an inaccurate or incomplete disclosure simply because you want to resolve the matter quickly. The declaration is an important part of the process and should only be completed once you are satisfied that the disclosure is correct and complete.

What Happens After You Submit the Disclosure?

Once HMRC receives the disclosure, it can review the information provided.

The disclosure is intended to establish the full amount owed and create a formal offer of payment. HMRC explains that the offer, together with its acceptance letter, creates a legally binding contract between the taxpayer and HMRC.

HMRC may contact you if it needs further information or has concerns about the figures or penalty included in the disclosure.

This means the process does not necessarily end immediately after the online form has been submitted.

Can HMRC Reject a Let Property Campaign Disclosure?

Yes.

HMRC can reject a disclosure where it is incomplete or does not properly deal with the tax, interest and penalties that are due.

For example, HMRC states that a disclosure can be rejected if the correct amount of interest has not been included. HMRC can also review the penalty calculation and may take further action where it believes the penalty is too low.

This is why accuracy matters more than simply submitting a disclosure within the 90-day period.

What If You Made an Honest Mistake?

An honest mistake does not automatically mean that there is no tax to pay.

If rental income should have been declared but was omitted, the underlying tax and interest may still be due.

However, the circumstances behind the error are relevant when considering penalties. HMRC distinguishes between different types of behaviour, and reasonable care can affect whether a penalty is appropriate.

If you genuinely misunderstood the property tax rules, explain the circumstances accurately rather than describing the error as deliberate or careless without considering the facts.

Example: Undeclared Rental Income From a UK Property

Suppose an individual landlord has rented out a UK property for several years but failed to declare the rental income.

The landlord discovers the problem in 2026 and decides to correct the position voluntarily.

The process would generally involve:

1. Identifying every relevant tax year.
2. Reconstructing the rental income for each year.
3. Identifying allowable expenses for each year.
4. Recalculating the landlord’s taxable income.
5. Calculating the additional Income Tax due.
6. Calculating statutory interest.
7. Considering the appropriate penalty based on the circumstances.
8. Notifying HMRC of the intention to make a disclosure.
9. Submitting the completed disclosure within the required timeframe.
10. Paying the amount due or agreeing payment arrangements with HMRC.

The final liability cannot be determined simply by applying a fixed percentage to the rental income because the landlord’s other income, allowable expenses, tax rates, previous tax returns, losses, finance costs and other circumstances may affect the calculation.

What About Rental Income From an Overseas Property?

The Let Property Campaign can apply to individual landlords with undisclosed residential property income from overseas property.

However, overseas property can introduce additional tax considerations, including foreign tax paid, residence status and the application of a double taxation agreement.

HMRC’s campaign guidance specifically distinguishes offshore liabilities when calculating penalties, with the potential maximum penalty for an offshore liability being higher than the maximum for a UK liability.

If overseas rental income is involved, the disclosure should be reviewed carefully before submission because both the underlying tax and penalty calculation can be more complicated.

Does the Let Property Campaign Apply to Holiday Lets?

HMRC includes holiday lettings within the types of residential property income that can be disclosed under the campaign.

However, the tax treatment of holiday accommodation has changed significantly following the abolition of the Furnished Holiday Lettings regime from April 2025.

If you are correcting historic holiday-let income, the tax rules applying to each individual tax year need to be considered rather than applying today’s rules retrospectively.

Let Property Campaign and Making Tax Digital in 2026/27

The Let Property Campaign deals with historic undisclosed tax liabilities. It should not be confused with the ongoing requirements for reporting property income under Making Tax Digital for Income Tax.

From 6 April 2026, Making Tax Digital for Income Tax applies to some landlords and sole traders based on their qualifying income. Landlords within the scope of MTD need to use compatible software to keep digital records and send quarterly updates to HMRC.

This means a landlord correcting historic rental income in 2026/27 may also need to consider their current and future property reporting obligations separately.

For example, correcting five years of previously undeclared rental income through the Let Property Campaign does not replace the landlord’s obligation to comply with the normal tax reporting requirements going forward.

How to Avoid Problems After Making a Disclosure

Once your historic tax position has been corrected, the next priority is making sure the same issue does not happen again.

Keep complete property records

Keep records of rental receipts, expenses, invoices, bank transactions, mortgage interest and other relevant documents.

Separate property and personal transactions

Using a separate bank account for property activity can make it easier to identify rental income and property expenses, particularly where several properties are involved.

Review expenses before claiming them

Not every cost connected with a rental property is automatically an allowable revenue expense. Some expenditure is capital rather than revenue, and finance costs have specific rules for individual residential landlords.

Report future rental income correctly

If you are required to file a Self Assessment tax return, make sure the property income is included correctly in future returns.

HMRC states that taxable property profits generally need to be reported through Self Assessment where the relevant filing requirements apply.

Consider Making Tax Digital

If your qualifying income means you fall within the Making Tax Digital for Income Tax rules, make sure you have compatible software and understand the digital record-keeping and quarterly update requirements.

Let Property Campaign Checklist

If you believe you have undeclared rental income, use the following checklist before submitting your disclosure:

• Identify every residential property you have rented out.
• Identify whether any properties were located overseas.
• Establish which tax years contain undeclared income.
• Collect rental statements and bank records.
• Calculate total rental income for each relevant year.
• Review allowable property expenses.
• Check finance costs and the rules applying to each year.
• Review any previous tax returns.
• Calculate the additional tax due.
• Calculate statutory interest.
• Assess the appropriate penalty.
• Check whether other previously undisclosed income or gains need to be included.
• Notify HMRC of your intention to disclose.
• Record the disclosure reference number and payment reference.
• Submit the disclosure within the required 90-day period.
• Pay the amount due or agree payment arrangements with HMRC by the deadline.
• Put systems in place to report future rental income correctly.

Case Study: Helping a Landlord Correct Undeclared Rental Income Through the Let Property Campaign

A landlord contacted our Farringdon office by phone after realising that rental income from a UK residential property had not been fully declared on their previous Self Assessment tax returns. They were unsure how far back they needed to review their records, whether they could still make a voluntary disclosure and how the tax, interest and potential penalties would be calculated.

During our initial discussion, we explained how the Let Property Campaign provides an HMRC disclosure route for individual landlords with previously undeclared residential property income. We reviewed the landlord’s circumstances and discussed the importance of establishing the correct rental income and allowable property expenses for each affected tax year before attempting to calculate any penalty.

The landlord had several years of rental records but was concerned that some expenses and mortgage costs had been treated incorrectly. We helped them separate rental receipts from allowable property expenses, review their previous Self Assessment returns and identify the years that required attention. We also discussed how finance costs, property losses and other income can affect the final tax calculation, meaning that the liability could not simply be calculated by applying a percentage to the total rent received.

As part of the wider review, we also discussed the landlord’s ongoing compliance obligations. This included Self Assessment, keeping appropriate property records and Making Tax Digital for Income Tax, particularly because the landlord needed to distinguish between correcting historic undeclared income through the Let Property Campaign and meeting their reporting obligations going forward.

We then explained the disclosure process, including notifying HMRC, retaining the disclosure and payment references, preparing the calculations and dealing with the applicable 90-day timeframe. We also discussed the potential penalty position and why voluntary disclosure, cooperation and the quality of the information provided can affect the final penalty.

By the end of the review, the landlord had a clearer understanding of the historic tax position and the steps required to bring the undisclosed rental income to HMRC’s attention. More importantly, they had a structured approach for maintaining their property records and reporting rental income correctly in future, reducing the risk of the same issue arising again.