Undeclared Rental Income: What You Need to Know About HMRC’s Let Property Campaign
The Let Property Campaign is a UK government initiative aimed at landlords who have not declared rental income and are therefore not paying the correct amount of tax. If you are a landlord with unpaid tax, you may be able to take advantage of the Let Property Campaign to disclose any unpaid tax and bring your tax affairs up to date.
Penalties for undisclosed rental income can range from 0% – 100% depending on the circumstances of the failure to disclose. Many factors play a role in the penalty including whether it was deliberate or not and whether the disclosure was voluntary. To read more about how the HMRC calculates these penalties you can check out our post: Failure To Notify Penalty.
What Is the HMRC Let Property Campaign?
The Let Property Campaign is a program launched by HM Revenue and Customs (HMRC) in the United Kingdom aimed at landlords who have not declared their rental income. It provides landlords with the opportunity to bring their tax affairs up to date voluntarily and receive more favourable terms.
Under the program, landlords are required to disclose any previously undeclared rental income and pay any outstanding taxes, interest, and penalties owed to HMRC. The program is open to all landlords, including those who rent out a single property, multiple properties, or a room in their own home, often supported by tax advisor in London.
If you’re a landlord lying awake at night worrying about undeclared rental income, you’re not alone. HMRC’s Let Property Campaign (LPC) is still live in 2025 — and with new data-matching, nudge letters, and DAC7 reporting from Airbnb and other platforms, landlords across London are under the microscope. The anxiety many landlords feel isn’t just about numbers; it’s about uncertainty, fear of penalties, and not knowing how far HMRC might go back.
At CIGMA Accounting Ltd, we understand these internal struggles. Landlords often arrive to us nervous and overwhelmed, fearing the worst. We go beyond filling out forms — we explain, reassure, and strategically challenge HMRC where necessary. In fact, in some cases, we’ve brought penalties down to zero by demonstrating context and cooperation. That combination of expertise and empathy means our clients leave not just compliant, but confident and calm
HMRC DISCLOSURE FACILITY
The Let Property Campaign is HMRC’s disclosure facility for landlords who haven’t declared all their rental income. It applies to:
- UK residential landlords (buy-to-let, HMOs, single lets, multiple properties).
- Overseas landlords with UK rental income.
- Accidental landlords (inherited property or moved home).
- Short-let landlords (Airbnb, Booking.com) — a growing target since DAC7 reporting began in 2024.
Not included:
- Companies.
- Trusts.
- Commercial property landlords.
Reference: HMRC – Let Property Campaign.
How the Disclosure Works (Step-by-Step)
The LPC runs via HMRC’s Digital Disclosure Service (DDS):
- Notify HMRC – register intent to disclose.
- Receive DRN/PRN – HMRC sends reference numbers.
- 90-Day Window – calculate tax, interest, and penalties.
- Submit & Pay – disclosure is submitted and settled (or Time to Pay arranged).
Many landlords tell us the 90-day window feels like a ticking clock. That’s where CIGMA steps in — we manage the process, keep the timeline on track, and ensure you don’t make costly mistakes under pressure.
How Many Years Back Must You Disclose?
- 4 years – where reasonable care was taken but an error occurred.
- 6 years – if careless.
- 12 years – offshore income.
- 20 years – deliberate behaviour.
Example: A Wimbledon landlord who misapplied mortgage interest rules may only need a 6-year disclosure. By contrast, a Canary Wharf portfolio landlord who knowingly omitted offshore rents could face 20 years.
Reference: HMRC Compliance Manual – Time Limits.
Penalties: What Landlords Fear Most
| Behaviour | Unprompted Penalty | Prompted Penalty | Example |
|---|---|---|---|
| Reasonable care | 0% | 0% | Landlord in Sutton made a minor calculation error; HMRC accepted no penalty. |
| Careless | 0% – 30% | 15% – 30% | Wimbledon landlord forgot to declare Airbnb side-income; reduced penalty with cooperation. |
| Deliberate | 20% – 70% | 35% – 70% | Farringdon landlord knowingly excluded rental income for years; reclassified as careless by CIGMA, penalty cut to zero. |
| Deliberate & concealed | 30% – 100% | 50% – 100% | Chelsea landlord hid income using offshore accounts; penalties negotiated down with expert intervention. |
At CIGMA, we know that behind every “deliberate” label there’s often a story — confusion, poor advice, or life circumstances. We’ve successfully reclassified “deliberate” cases as “careless,” reducing penalties to zero.
Reference: FA 2007 Sch 24 – Penalties.
benefits of the campaign
While you may not side-step all the penalties of not declaring rental income, the Let Property Campaign offers many benefits and incentives to landlords to declare their rental income, including support from tax services in London:
- Reduced penalties.
- A simpler and more streamlined process for bringing tax affairs up to date.
- The opportunity to spread payments over a period of time.
- Landlords who voluntarily disclose their rental income may also avoid criminal prosecution.
What Are The Let Property Campaign Requirements?
The campaign is designed to encourage landlords who have not declared rental income to come forward and declare it voluntarily to work with the HMRC. In order to take part in the campaign, you need to meet the following requirements:
- You must be a landlord who is renting out residential property in the UK or abroad.
- You must not have declared all of your rental income on your tax returns.
- You must not be currently under investigation by HM Revenue and Customs (HMRC).
- You must not have received a letter from HMRC telling you that they suspect you have unpaid taxes.
Case Studies: Turning Anxiety Into Relief
Sutton – Family Landlord
One landlord hid unopened HMRC letters in a drawer for years out of fear. After coming to us, we secured a nil penalty outcome. The relief they felt was as valuable as the financial saving.
Wimbledon – Accidental Landlord
Inherited a property, rented it, and didn’t realise income had to be declared. HMRC classed this as “deliberate.” We fought to show genuine mistake. Penalties: £22,000 → £0.
Farringdon – Airbnb Host
DAC7 reporting flagged undeclared income. The client panicked about reputational risk. We negotiated expenses, reduced tax due by 40%, and restored peace of mind.
Chelsea & Mayfair – Portfolio Investor
Complex 12-year disclosure. HMRC demanded high penalties. We delivered a structured disclosure and brought penalties down by hundreds of thousands. The client later said: “You gave me my life back.”
Canary Wharf – Consultancy Landlord
Staring at a potential £250,000 liability, the directors feared insolvency. With CIGMA’s intervention, penalties were halved and Time to Pay agreed — preserving both their business and reputation.
Related link: HMRC Compliance Investigations – CIGMA
cigma accounting reviews
2. Calculate the amount of tax you owe and make a disclosure to HMRC.
Calculating the amount you owe to the HMRC can be challenging. Especially if the tax returns need to be back-dated due to undeclared rental income for previous years.
A tax consultant like CIGMA Accounting can assist you by looking at your income and expenses holistically and completing the tax return calculations to minimise your tax liability as much as legally possible.
The HMRC is likely to request a complete Self Assessment (personal tax return). If you have never completed a self assessment before, you can read this informational blog: Do I need to Submit a Self Assessment?
3. Pay any tax you owe to HMRC.
4. Make sure you keep up-to-date with your tax affairs in the future.
Benefits of Having A Professional Tax Advisor
It is important to declare all rental income on your tax return, even if you are not making a profit from your rental property. Tax return specialists, often working alongside accountants in London, know exactly what they need to do for you to reap the most benefits from government campaigns and assistance programs.
Some benefits of having a professional accountant or tax advisor on your side are:
- They can ensure that you are taking advantage of all available deductions and credits
- Provide guidance on how to properly report your rental income.
- If you are ever audited by the HMRC, they can minimise the risk of any penalties or fines
- Up to date with the latest legislation for rental income
Need to disclose undeclared income but don’t want to talk to the HMRC? We can help!
Reach out to us by completing this form and one of our staff members will get in touch within one business day.
Allowable Expenses: Common Landlord Mistakes
Many landlords overpay because they don’t claim all allowable expenses — or they incorrectly claim disallowed costs.
Examples of allowable expenses:
- Repairs and maintenance (but not capital improvements).
- Letting agent fees.
- Legal costs (only for renewing short leases or evicting tenants).
- Mortgage interest (with restrictions — finance cost relief applies).
- Council tax, utilities, insurance when paid by the landlord.
- Replacement of domestic items (furniture, appliances).
Common mistakes:
- Confusing improvements with repairs (e.g., adding an extension ≠ deductible).
- Not splitting expenses correctly in joint ownership cases.
- Misunderstanding mortgage interest restrictions post-2020.
Related link: Landlords Accounts – CIGMA
Step-by-Step Checklist for Landlords
If you’re preparing a disclosure, here’s what you’ll need:
- Property addresses, ownership details, and rental dates.
- Rental income statements (bank statements, Airbnb/Booking.com reports).
- Expense receipts (repairs, insurance, letting fees, etc.).
- Mortgage interest summaries.
- Previous tax returns and accounts.
- Details of joint ownership splits (Form 17 if applicable).
- Evidence of overseas property income if relevant.
- Copies of correspondence from HMRC (including nudge letters).
Many landlords freeze at this stage — overwhelmed by paperwork. At CIGMA, we simplify it with secure, GDPR-compliant systems, ensuring data safety and peace of mind.
Frequently Asked Questions
What is the HMRC Let Property Campaign and is it still running?
The HMRC Let Property Campaign is an ongoing voluntary disclosure programme that allows residential landlords to declare previously unreported rental income and bring their tax affairs up to date. It is still active and increasingly enforced, with HMRC using DAC7 platform reporting from Airbnb and Booking.com, bank data matching, and nudge letters to identify landlords with undeclared rental income. Acting voluntarily before HMRC contacts you leads to significantly lower penalties.
Who qualifies to use the Let Property Campaign disclosure process?
The Let Property Campaign disclosure is open to individual UK residential landlords — including buy-to-let landlords, accidental landlords, HMO owners, short-let hosts, and overseas landlords with UK rental income who have not declared all their rental income to HMRC. It does not apply to companies, trusts, or commercial property landlords. You must also not currently be under a formal HMRC investigation to use the campaign.
What are the penalties for undeclared rental income in the UK?
Penalties for undeclared rental income range from 0% to 100% of the tax owed, depending on the circumstances. Careless errors with an unprompted voluntary disclosure can attract 0% to 30%. Deliberate non-disclosure ranges from 20% to 70%, and deliberate concealment from 30% to 100%. Disclosing voluntarily before HMRC raises an enquiry consistently results in lower penalty rates than waiting to be caught.
How far back can HMRC investigate undeclared rental income?
The lookback period for HMRC investigations into undeclared rental income depends on the nature of the non-compliance. For innocent errors where reasonable care was taken, HMRC can go back 4 years. Careless errors extend to 6 years. Offshore income can be reviewed for up to 12 years. Deliberate non-disclosure carries the longest exposure at up to 20 years. Most landlords without overseas rental income face a 4 to 6 year disclosure window.
How does the Let Property Campaign disclosure process work step by step?
The Let Property Campaign disclosure follows four steps. First, you notify HMRC through the Digital Disclosure Service of your intention to disclose. Second, HMRC issues a Disclosure Reference Number and Payment Reference Number. Third, you have 90 days to calculate outstanding tax, interest, and penalties and submit a full and accurate disclosure. Fourth, you pay the amount owed — or arrange a Time to Pay agreement with HMRC if you cannot pay in full immediately.
Can HMRC find out about undeclared rental income without me telling them?
Yes. HMRC has multiple ways to identify undeclared rental income. Since 2024, DAC7 regulations require platforms such as Airbnb and Booking.com to report landlord earnings directly to HMRC. HMRC also uses land registry data, bank account information, letting agent records, and advanced data-matching tools. Landlords who have received nudge letters have already been identified as a risk. The likelihood of HMRC discovering undeclared rental income without disclosure has never been higher.
Why should I use a Let Property Campaign accountant rather than disclosing myself?
Using a specialist Let Property Campaign accountant ensures your disclosure is accurate, complete, and presented in the most favourable light to HMRC. An experienced accountant can correctly calculate allowable expenses to reduce the tax owed, challenge HMRC’s classification of behaviour from deliberate to careless potentially reducing penalties to zero negotiate Time to Pay arrangements, and manage all communications with HMRC on your behalf, removing the stress and risk of errors in a self-managed disclosure.
What happens if I ignore HMRC's Let Property Campaign and do nothing?
Ignoring the HMRC Let Property Campaign significantly increases your financial and legal risk. If HMRC discovers undeclared rental income through its own investigation rather than a voluntary disclosure, penalties are substantially higher potentially reaching 100% of the tax owed for deliberate concealment. HMRC may also charge interest from the date the tax was originally due. In the most serious cases of deliberate fraud, criminal prosecution is possible, though most landlord cases result in financial settlements rather than prosecution.
Undeclared Rental Income: Understanding the Let Property Campaign
The Let Property Campaign allows landlords to voluntarily disclose previously undeclared UK or overseas rental income to HMRC. Acting before HMRC contacts you can help reduce penalties and interest, but full disclosure and accurate reporting are essential to bring your tax affairs back into compliance.
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